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Co-Op Brewery?

September 10, 2015

Co-Op Brewery?

http://draftmag.com/flying-bike-coop-brewery-seattle/

Co-Ops are an interesting concept, particularly in a state like Georgia with strict tied-house prohibitions. For instance, Georgia regulations state that a supplier is prohibited from having an ownership interest, partnership arrangement, or business association with an actor on a different tier, i.e., wholesale and/or retail.  If a large number of people each invest some nominal sum of money, say, $100 for a piece of the pie, is that enough of an ownership interest to trigger the tied-house prohibition?  TBD.  How does the brewery know whether any of these investors have any ownership interest, partnership arrangement, or business association with a business on a different tier?

When seeking investors, whether for $100 or $1M, a brewery should consider whether to require the execution by the investor of some sort of representation and warranty reflecting that the investor does not have any ownership interest, partnership arrangement, or business association in one or more of the other tiers.

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