Mont. Code Ann. » TITLE 16. ALCOHOL, TOBACCO, AND MARIJUANA · CHAPTER 4. LICENSE ADMINISTRATION · Part 4. Licensing Criteria
Montana Code Annotated

Mont. Code Ann. § 16-4-401 (2026)

License As Privilege -- Criteria For Decision On Application -- Restrictions -- Colocated Licenses

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  1. MCA Contents
  2. TITLE 16
  3. CHAPTER 4
  4. Part 4
  5. 16-4-401 License as privilege -- criteria for decision on application -- restrictions -- colocated licenses

TITLE 16. ALCOHOL, TOBACCO, AND MARIJUANA

CHAPTER 4. LICENSE ADMINISTRATION

Part 4. Licensing Criteria

License As Privilege -- Criteria For Decision On Application -- Restrictions -- Colocated Licenses

16-4-401. License as privilege -- criteria for decision on application -- restrictions -- colocated licenses. (1) A license under this code is a privilege that the state may grant to an applicant and is not a right to which any applicant is entitled.

(2) Except as provided in 16-4-311 and subsection (5) of this section and subject to subsection (8), the department shall find in every case in which it makes an order for the issuance of a new license, for the approval of the transfer of a license, or for the renewal of a license that:

(a) if the applicant is an individual:

(i) the applicant's past record and present status as a purveyor of alcoholic beverages and as a business person and citizen demonstrate that the applicant is likely to operate the establishment in compliance with all applicable laws of the state and local governments;

(ii) the applicant has not been convicted of a felony or, if the applicant has been convicted of a felony, the applicant's rights have been restored; and

(iii) the applicant is not under 19 years of age;

(b) if the applicant is a publicly traded corporation:

(i) the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (2)(a);

(ii) each individual who has control over the operation of the license meets the requirements for an individual applicant listed in subsection (2)(a); and

(iii) the corporation is authorized to do business in Montana;

(c) if the applicant is a privately held corporation, all of the following must apply:

(i) each owner of 15% or more of the outstanding stock meets the requirements for an individual applicant listed in subsection (2)(a). If no single owner owns more than 15% of the outstanding stock, the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (2)(a), and the owners of 51% of the outstanding stock must meet the requirements of subsection (2)(a).

(ii) each individual who has control over the operation of the license meets the requirements for an individual applicant listed in subsection (2)(a);

(iii) each person who shares in the profits or liabilities of a license meets the requirements for an individual applicant listed in subsection (2)(a). This subsection (2)(c)(iii) does not apply to a shareholder of a corporation who owns less than 15% of the outstanding stock in that corporation except that the provisions of subsection (7) apply.

(iv) the corporation is authorized to do business in Montana;

(d) if the applicant is a general partnership, each partner must meet the requirements of subsection (2)(a);

(e) if the applicant is a limited partnership or a limited liability partnership, each general partner and all limited partners whose ownership interest in the partnership equals or exceeds 15% must meet the requirements of subsection (2)(a). If no single limited partner's interest equals or exceeds 15%, then 51% of all limited partners must meet the requirements of subsection (2)(a).

(f) if the applicant is a limited liability company:

(i) all managing members and those members whose ownership interest in the company equals or exceeds 15% must meet the requirements of subsection (2)(a). If no single member's interest equals or exceeds 15%, then 51% of all members must meet the requirements of subsection (2)(a).

(ii) the limited liability company is authorized to do business in Montana;

(g) if the applicant is a trust, the trustee must meet the requirements of subsection (2)(a);

(h) if the applicant is a nonprofit organization:

(i) the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (2)(a); and

(ii) the nonprofit organization is authorized to do business in Montana;

(i) if the applicant is a cooperative association:

(i) the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (2)(a); and

(ii) the cooperative association is authorized to do business in Montana.

(3) The applicant and any individual of the applicant who must meet the requirements of (2)(a) must be current on all tax filings, taxes, interest, and penalties due to the state; however, nothing in this subsection authorizes the department to consider an applicant's tax status or whether the applicant was or is an income tax protestor when renewing the license.

(4) In the case of a corporate applicant, the requirements of subsection (2)(b) or (2)(c) apply separately to each class of stock.

(5) The provisions of subsection (2) do not apply to an applicant for or holder of a license pursuant to 16-4-302 or an applicant for registration under 16-4-101 or 16-4-107.

(6) An applicant's source of funding must be from a suitable source. A lender or other source of money or credit may be found unsuitable if the source:

(a) is a person whose prior financial or other activities or criminal record:

(i) poses a threat to the public interest of the state;

(ii) poses a threat to the effective regulation and control of alcoholic beverages; or

(iii) creates a danger of illegal practices, methods, or activities in the conduct of the licensed business; or

(b) has been convicted of a felony unless the person's rights have been restored.

(7) (a) Except as specifically provided in this code relating to financial interests in licenses, nothing in this section applies or otherwise prohibits an applicant or licensee from obtaining personal financing from a licensed financial institution, taking advantage of consumer credit, or using a personal credit card to make purchases on behalf of a licensed entity if the applicant or licensee is reimbursed by the licensed entity within 90 days. An applicant or individual may obtain multiple transactions up to an aggregate maximum of $100,000 with each individual transaction not to exceed $25,000 to be used on behalf of the licensed entity.

(b) A licensee's use of short-term financing of 90 days or less from institutional lenders and noninstitutional lenders does not constitute an undisclosed ownership interest in the license.

(c) It is the intent of this subsection (7) to facilitate the efficient administration of an entity licensed under this code.

(8) (a) An individual applying for an all-beverages license or having any ownership interest in an entity applying for an all-beverages license may not, if the application were to be approved, own an interest in more than half the total number of allowable all-beverages licenses in any quota area described in 16-4-201.

(b) If two or more individuals through a business or family relationship share in the profits or liabilities of all-beverages licenses, the aggregate number of licenses in which they share in the profits or liabilities may not exceed half the total number of allowable all-beverages licenses in the specific quota area in which the all-beverages licenses will be held.

(c) An applicant applying for an all-beverages license and any individual of the applicant who must meet the requirements of subsection (2)(a) may not, if the application were to be approved, possess an ownership interest in more than the limit established in 16-4-205 for establishments licensed under this chapter for all-beverages sales. However, resort retail all-beverages licenses issued under 16-4-213 do not count toward this limit.

(d) An applicant and any individual of the applicant who must meet the requirements of subsection (2)(a) may not possess an ownership interest in an agency liquor store as defined in 16-1-106.

(e) Except as provided in subsection (9), an applicant for an on-premises consumption license or any member of the applicant's immediate family must be without financing from and may not have any affiliation to a manufacturer, importer, bottler, or distributor of alcoholic beverages, except that an applicant's spouse may possess an ownership interest in one or more manufacturer licenses. This prohibition also applies to any individual of the applicant who must meet the requirements of subsection (2)(a).

(f) An applicant for an off-premises consumption license or any member of the applicant's immediate family must be without financing from and may not have any affiliation to a manufacturer, importer, bottler, or distributor of alcoholic beverages. This prohibition also applies to any individual of the applicant who must meet the requirements of subsection (2)(a).

(g) Except as provided in subsection (9), an applicant for a manufacturing, importing, or distributing license and any individual of the applicant who must meet the requirements of subsection (2)(a) may not possess an ownership interest in any establishment licensed under this chapter for retail alcoholic beverage sales.

(h) An applicant for a distributor license and any individual of the applicant who must meet the requirements of subsection (2)(a) may not be a manufacturer of an alcoholic beverage or owned or controlled by a manufacturer of an alcoholic beverage.

(9) (a) A person with an ownership interest in a licensed brewery or licensed winery may hold complete ownership of up to a combined total of three retail licenses issued pursuant to 16-4-105 or 16-4-201. The owner of a retail license issued pursuant to 16-4-105 or 16-4-201 may hold complete ownership of brewery or winery licenses. The first of these licenses must be a colocated license.

(b) A person with an ownership interest in a licensed distillery may hold complete ownership of up to three retail licenses issued pursuant to 16-4-201. The owner of a retail license issued pursuant to 16-4-201 may hold complete ownership of distillery licenses. The first of these licenses must be a colocated license.

(c) A person with an ownership interest in a retail license issued pursuant to 16-4-105 may not also have an ownership interest in a distillery license.

(d) To hold both a manufacturing license and a retail license pursuant to this subsection (9), a licensee:

(i) must maintain both the manufacturing license and the retail license on the same premises for the first of these licenses, known as a colocated premises;

(ii) must have 100% of the same ownership between the manufacturing license and the retail license; and

(iii) must provide and serve through the retail license alcohol produced by other manufacturers that are not affiliated or financially interested, either directly or indirectly, in the conduct or operation of the business in which the license was issued pursuant to 16-4-105 and 16-4-201, or the licensed brewery, winery, or distillery.

(e) Colocated licenses may transfer beer manufactured, liquor distilled, or wine produced by the licensee between the colocated manufacturing license and the retail license without it being considered distributed or delivered as provided in this code.

(f) For the purposes of this code, the following definitions apply:

(i) "Colocated license" means a manufacturing license and a retail license owned completely by a licensee and that are operated at one premises.

(ii) "Colocated premises" means a premises where a manufacturing license and a retail license are both located.

(10) Ownership of warehouse receipts as provided in 16-4-312 does not constitute ownership, control, or affiliation with the distillery that originally issued the warehouse receipt. A person who holds a warehouse receipt as provided in 16-4-312(6) is not restricted from any activity regulated by the department that is otherwise legal for the person. Except in connection with the department's income tax enforcement duties as provided in Title 15, the department is not authorized to require a distillery or any other person to provide information regarding the sale or purchase of warehouse receipts.

History: En. Sec. 10, Ch. 84, L. 1937; amd. Sec. 1, Ch. 76, L. 1945; amd. Sec. 1, Ch. 244, L. 1947; amd. Sec. 1, Ch. 10, L. 1957; Sec. 4-412, R.C.M. 1947; amd. and redes. 4-4-108 by Sec. 90, Ch. 387, L. 1975; R.C.M. 1947, 4-4-108; amd. Sec. 2, Ch. 186, L. 1979; amd. Sec. 3, Ch. 359, L. 1981; amd. Sec. 1, Ch. 178, L. 1983; amd. Sec. 20, Ch. 19, L. 1985; amd. Sec. 1, Ch. 133, L. 1985; amd. Sec. 28, Ch. 68, L. 1987; amd. Sec. 36, Ch. 530, L. 1995; amd. Sec. 2, Ch. 148, L. 1999; amd. Sec. 4, Ch. 448, L. 2001; amd. Sec. 5, Ch. 591, L. 2005; amd. Sec. 1, Ch. 197, L. 2007; amd. Sec. 2, Ch. 211, L. 2013; amd. Sec. 7, Ch. 336, L. 2019; amd. Sec. 2, Ch. 161, L. 2021; amd. Sec. 5, Ch. 568, L. 2021; amd. Sec. 13, Ch. 601, L.2023; amd. Sec. 2, Ch. 488, L. 2025; amd. Sec. 44, Ch. 637, L. 2025.

Notes of Decisions
Cited in 7 cases, 1979–2008 · leading case: Germann v. Stephens, 2006 MT 130, 137 P.3d 545.
Sort: Relevance Newest Treatment
Germann v. Stephens, 2006 MT 130, 137 P.3d 545. · cites it 9× “¶29 Section 16-4-401, MCA, outlines the necessary criteria for obtaining a liquor license in Montana.”
Broers v. Montana Dep't of Revenue, 773 P.2d 320 (Mont. 1989). · cites it 12× “The statute at issue here, § 16-4-401, MCA, formed the basis upon which the Department denied Broers' renewal of his liquor license.”
Mont. Tavern Ass'n v. State, Dept. of Revenue, 729 P.2d 1310 (Mont. 1986). · cites it 3× “The license criteria were: “(a) Licensee must be a person who has been granted a license under Section 16-4-401(2), MCA, to sell alcoholic beverages for consumption on the premise [sic].”
In re the Transfer of Location for Montana All-Alcoholic Beverages Resort License No. 07-999-2667-009, 2008 MT 165, 184 P.3d 324. · cites it 2× “It is restricted to those matters with respect to the qualifications of an applicant in § 16-4-401, MCA, and grounds for denial of an application stated in § 16-4-405, MCA.”
Tokumoto v. Dep't of Revenue, 869 P.2d 782 (Mont. 1994). · cites it 32× “The District Court, giving deference to DOR's interpretation of its own regulations, found that DOR correctly interpreted §§ 16-4-401 and -405, MCA, when it issued its approval of the license to Greenleaf.”
Feurherm v. Schmaing, 592 P.2d 924 (Mont. 1979). · cites it 12× “For example, the Florida Supreme Court stated that "due to the limitations respecting the number and location of liquor establishments and the conditions under which the license is issued, a liquor license has come to have the quality of property, with an actual pecuniary value…”
The Stube Chuckwagon Grill, 2008 MT 165. · cites it 2× “It is restricted to those matters with respect to the qualifications of an applicant in § 16-4-401, MCA, and grounds for denial of an application stated in § 16-4-405, MCA.”
Mont. Code Ann. § 16-4-401(1): 2 cases
Germann v. Stephens, 2006 MT 130, 137 P.3d 545. “¶29 Section 16-4-401, MCA, outlines the necessary criteria for obtaining a liquor license in Montana.”
Broers v. Montana Dep't of Revenue, 773 P.2d 320 (Mont. 1989). “The statute at issue here, § 16-4-401, MCA, formed the basis upon which the Department denied Broers' renewal of his liquor license.”
Mont. Code Ann. § 16-4-401(2): 2 cases
Mont. Tavern Ass'n v. State, Dept. of Revenue, 729 P.2d 1310 (Mont. 1986). “The license criteria were: “(a) Licensee must be a person who has been granted a license under Section 16-4-401(2), MCA, to sell alcoholic beverages for consumption on the premise [sic].”
Tokumoto v. Dep't of Revenue, 869 P.2d 782 (Mont. 1994). “The District Court, giving deference to DOR's interpretation of its own regulations, found that DOR correctly interpreted §§ 16-4-401 and -405, MCA, when it issued its approval of the license to Greenleaf.”
Mont. Code Ann. § 16-4-401(2)(a)(iii): 1 case
Tokumoto v. Dep't of Revenue, 869 P.2d 782 (Mont. 1994). “The District Court, giving deference to DOR's interpretation of its own regulations, found that DOR correctly interpreted §§ 16-4-401 and -405, MCA, when it issued its approval of the license to Greenleaf.”
Mont. Code Ann. § 16-4-401(2)(a)(iv): 1 case
Broers v. Montana Dep't of Revenue, 773 P.2d 320 (Mont. 1989). “The statute at issue here, § 16-4-401, MCA, formed the basis upon which the Department denied Broers' renewal of his liquor license.”
Mont. Code Ann. § 16-4-401(2)(b)(i): 1 case
Tokumoto v. Dep't of Revenue, 869 P.2d 782 (Mont. 1994). “The District Court, giving deference to DOR's interpretation of its own regulations, found that DOR correctly interpreted §§ 16-4-401 and -405, MCA, when it issued its approval of the license to Greenleaf.”
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