Gov. John Hickenlooper signed into law Friday sweeping legislation that would transform how Coloradans buy their libations.

With hours left to act before a midnight deadline, the former brewpub tycoon took up a legislative compromise meant to stave off a ballot measure to put full-strength beer and wine on grocery shelves. He had three options: veto the bill, sign it or allow it to become law without his support.

Senate Bill 197, passed in the final days of the legislative session that ended in May, represents the biggest change to Colorado liquor laws since Prohibition in 1933.

The bipartisan bill was offered as a way to head off a proposed ballot item in November that would allow major retailers to sell wine and full-strength beer immediately. Those stores can sell only the less-popular 3.2 percent “near beer” now.

Hickenlooper chose to sign the measure because, he said, “in the end, we think it was important to send a pretty strong message that this is a good compromise.”

The new law allows grocers and major retailers such as Walmart and Target to compete directly with liquor stores and further lets them expand sales to 20 locations in phases over 20 years. Current law limits each chain to sales at one location in the state.

“My hope is they won’t go forward with the initiatives,” Hickenlooper said, “because then I would have to go out and be an adversary, and no governor wants to be an adversary to part of their businesses.”

Your Choice Colorado, a coalition led by King Soopers and Safeway, has not changed its mind about the ballot initiative. It said Friday it is considering legal action against the legislation, said campaign manager Georgie Aguirre-Sacasa.

Your Choice Colorado is required to turn in the signatures of 98,492 registered voters to get on the ballot and potentially spend tens of millions of dollars to campaign for its passage.

“It is deeply disappointing that Gov. Hickenlooper signed this flawed and unconstitutional legislation that only protects a handful of big liquor stores and liquor lobbyists to become law,” Aguirre-Sacasa said.

“First the legislature and now the governor have denied Coloradan consumers what they want and deserve: real beer and wine in grocery stores. Your Choice Colorado will continue to weigh our options to keep standing by the voters, giving them the ability to make their voices heard amidst this broken system — whether through a legal challenge to this sloppy bill or, as planned, taking it to the ballot in 2016.”

A campaign to defeat the ballot initiative, called Keep Colorado Unique, supported the compromise.

“This historic compromise protects local small businesses and Colorado’s unique craft brewing culture while allowing the phase-in of alcohol sales in grocery stores,” said spokeswoman Jennie Peek-Dunstone. “We thank the governor for his commitment to small businesses and urge King Soopers and Safeway to drop their onerous initiatives, so that we can all focus our energy on growing Colorado businesses.”

Early on, Walmart was expected to support and help finance the ballot initiative campaign, but Friday the company voiced support for the new law instead.

“This historic compromise allows Coloradans to enjoy

the convenience and selection they desire,” said Josh Phair, Walmart’s director of government relations.

The governor and legislators worried the competition could drive hundreds of liquor stores out of business, many of which are in the same shopping plaza as grocery stores.

For grocery stores and other major retailers to get those 20 licenses, they would have to buy up all the liquor-store licenses within 1,500 feet of each store, or 3,000 feet in licensing jurisdictions of less than 10,000 people.

The law takes effect on July 1, it could be months later before grocers have the licenses they need to sell more alcohol.

Grocery stores could have up to five locations in 2017, eight in 2022, 13 in 2027 and 20 in 2032. After 2037, the limits go away and open competition ensues.

David Anderson, co-owner and manager of Uptown Wines, Beer and Spirits, said the legislation, compared with the ballot initiative, provided small mom-and-pop businesses such as his with some level of security for the future.

“I’ve been in this business for 30 years — this is what I do,” he said. “This is my career … my chosen profession.”

Kent Seidel, co-owner of Uptown Wines, Beer and Spirits, said the ballot initiative would have “put big corporations in the driver’s seat.”

“I think it’s a decent compromise. Knowing what will happen next and not worrying about a big chain coming in and taking business (is good),” he said.

Jeanne McEvoy, chief executive of the Colorado Licensed Beverage Association, urged Your Choice Colorado to abandon the ballot initiative and join others interested in expanded sales.

“We call upon Your Choice Colorado to cease their ballot pursuit and recognize what we accomplished through the legislation to provide consumers more choices while continuing to respect Colorado’s long tradition of valuing and supporting small businesses,” she said.

Liquor stores benefit in other ways from the bill, as well. An owner could have up to four licensed locations, instead of one. They also would be allowed to sell some food products, such a bread and cheese in a wine store.

One of the concerns of the state’s craft beer brewers, wineries and distillers was that corporate purchasing would squeeze them out. But under the new law each store with a license would have to have a designated manager on sight in charge of purchasing. The bill encourages, but does not mandate, buying Colorado products.

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