More Profitable Than Meth

Would you like to turn an $800 investment into as much as $150,000?

All you need to do is make a $375 down payment to the State of Idaho and be prepared to pony up another $425 when they issue a state liquor license. Licenses are issued on the basis of population–one license per 1,500 people and they are good only within city limits. Resorts and golf courses qualify under a different section of the code.

What that means in growth crazy Boise is that when a new subdivision is built or they annex 1,500 new residents–someone gets an $800 permit to sell booze which has a street value of up to $150,000.

The Boise waiting list currently has 110 eager investors on it. In Meridian there 49 waiting to get licensed and if population claims are true, that conservative community will soon have about 10 new hard liquor outlets.

The Alcohol Beverage Control–ABC– of the State Police administers the licensing. They require new booze peddlers to remain open 8 hours a day 6 days a week for the first six months of operation. And for good reason. Not only does the state make big bucks off the taxes, the only place you can buy hard booze is from the state government that regulates the sale and dispensing.

Not to worry however. Statewide, the chances of getting inspected by an ABC agent/investigator are slim to none. There are only TWO for the entire state from the Canadian border to Nevada.

By the way, if you don’t want to run your own retail booze operation, you can LEASE the license to someone else, sit back, and enjoy the profits. It is a better investment than cooking up meth since there is no need to buy pseudoephed at Wal-Mart.

Comments & Discussion

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  1. Talk about great financial advice! say, Guardian do you know any ” good” local stock tips?
    At the same time,why should the state be the only one that controls and profits from the “very lucrative” alcohol industry in this area? Why not open it up to good ole free enterprise so the outrageous prices in the state stores and bars become resonable?

    Then there’s the problem of what happens when you have a business community that caters to bars and their profits but instead of responsibly regulatng alcohol use decides there’s more money in just cracking down on their customers. Making taxi’s hard to reach or putting food venders a few blocks away is going to compound the problem for the bars, the police , and the city.Why? Well,Duuuhhh!! If you create a problem that you know is going to spiral out of control then you are obviously the source of the problem and thus liable to lawsuits from many hungry lawyers!

  2. Sounds just like how the funeral directors limit new funeral homes. Just try to open one and offer lower prices. Will not happen!

    How do you say restraint of trade (collusion) with government approval!!

  3. Hmm … howcum if you do this with tickets to a concert, it’s called “scalping,” and you can be arrested for it?

    If the goal is to make sure that only really rich people end up holding liquor licenses, and that small business owners have no chance of growing, why doesn’t the state just auction the licenses off in the first place?

    Seems like that law needs to be changed.
    (Or, we could just dump it and do like Nevada does — issue licenses to whoever wants them and meets the legal qualifications, and let the free market decide which bars live and which dies. Oops! I forgot — Idaho doesn’t go for that free-market stuff … hence the state-owned liquor stores.

    State wants to control drinking, so it sells liquor. Hmmm … makes about as much sense as controlling drunks by making them cross streets to get food and taxis.

    I can hardly wait to see what great ideas our sage councilors, legislationers and county commishes come up with next!

  4. Sad system it is. For those of us in the restaurant/hospitality business we are extorted to conduct our way of life. Attorneys grabbed ahold of this system years ago taught their doctor friends the tricks and with so much money invested I can’t imagine the system ever changing. Too bad we don’t value human character as a measure of who we issue liquor permits to.

    I wish they would sell permits to practice law or run for political office, can I get on that list, I would love to return the extortionist love?

    Dave Krick
    Bittercreek/Red Feather

  5. I always thought a liquor license actually cost a lot more than what you are reporting, Guardian.

    However, I agree with Dave Said that there should be permits to practice law or run for office.

  6. Idaho’s control over booze comes from the State Constitution Article III, Section 26,

    POWER AND AUTHORITY OVER INTOXICATING LIQUORS. From and after the thirty-first day of December in the year 1934, the legislature of the state of Idaho shall have full power and authority to permit, control and regulate or prohibit the manufacture, sale, keeping for sale, and transportation for sale, of intoxicating liquors for beverage purposes.

    If it really bothers people, start an initiative to get this section repealed.

    EDITOR NOTE–If you include an anti-gay clause, it will probably pass.

  7. I think there is a permit to practice law, its called law school, and it costs about the same as a liquor license.

    They don’t have the same name but economists label both as “barriers to entry.”

  8. Adam–
    Dave and Treva are talking about the ability to buy, sell, lease, that license like a stock certificate. The legal education can’t be had for $800 and then sold to a guy from down the street for $150K so he can use it.

    It is more like the Diamond brokers controlling the supply from Africa.

  9. Talk about control? If Bill Sali really wants to politic in the fashion of Helen Chenoweth he ought to have something to say about this sham of free market shenanigans. I heard some guy in Twin Falls owns a ton of liquor licenses just so he can lease them out. He kind of cornered the market so he can set the price of a lease. He opened up some sham bars to get around the law with one chair and table and one bottle of booze in a warehouse. I think he’s in the legal drug (pharmacy) business too. God created pot and they made that illegal. Isn’t Bill Sali on God’s side?

  10. We really need to de-regulate alcoholic beverages. The idea that the government can tell us when, where, what time-of-day and how old one has to be to have a beer or other alcoholic beverage is offensive. It is paternalistic in the extreme. Neither Team Dave, Dirk, Jim or Butch, or for that matter Dubya, is my father and I don’t like them telling me what to do or not do. I draw the line after they tell me not to kill or steal (and I don’t need them to tell me that).

  11. And since the issuance of new licenses is dependent on population growth, the Guardian’s article is at least partly about growth. My comments:

    We growthophobes are doomed to failure in our efforts to preserve the quality of life in Boise and the rest of Idaho. Here’s why:

    1. People who have REAL money are still building hotels in the Treasure Valley. They realize that money talks and quality of life walks and that growth will continue. They don’t care because they have second homes in the Caribbean.

    2. Illegal immigration will continue unabated. We do not have the political will to stop it (unfortunately).

    3. Legal immigration will continue. We do not have the political will to stop it (unfortunately).

    4. People (including many who shouldn’t) will continue to have, on average, more than one child per person (or two per couple) and population will continue to grow.

    5. People will continue to migrate from the northeast to the west.

    6. People will continue to vote for politicians who are dedicated to their destruction. Example: Middle Class voters voting for Republicans who cut taxes for the rich and raise them for the Middle Class. Example: Boise voters who voted for Dave Bieter because they thought he would do something SENSIBLE about growth. What a cruel joke.

  12. Mr. Logic,

    I was merely pointing out that while Dave and Treva are not “extorting” attorneys, some one is.

    Certainly the actual permit to sell liquor carries no value itself (or maybe 1/20th of a cent). It is the right to sell alcohol that is worth 150K. Similarly, a legal education carries little value as a commodity, you are right there. However, the true value of a legal education is the ability to practice law. ISB requires graduation from an ABA accredited law school.

    Aside from the public/private issue, I think that looking at the goals and purposes of the organizations the ABA is more like Idaho State Constitution Article III, Section 26 while De Beers is more similar to OPEC. I see the basic difference as regulating the number of firms versus regulating the amount of supply.

  13. I remember a guy that I used to do business with who had a liquor license that he figured was worth $100,000 to $150,000 (a really long time ago) because he could transfer or lease it to someone else and at that time the state wasn’t issuing any new ones due to lack of growth. What the state charges and what the actual “street” value is probably are not relative, but what do I know? He is a pretty sharp guy and I would bet serious money he won. The State needs to get out of the liquor business. Whatever happened to deregulation when you need it?

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