Tied-House regs

[Palmetto Coast]

Ok, we are getting ready to propose to investors. What exactly are the rules about retailers investing in the production side? We have a few restaurant owners who have expressed interest.

I've gone over the Tied-House regulations and I don't recall seeing anything against it. It seems mostly tied to what we can and can't do as "industry members". However, when they invest, don't they then become an industry member?

Can someone please set me straight?

Thanks,

Todd

[Curtis McMillan]

Anyone who owns or would benefit from ownership is disqualified as a stock owner.

Got to love the 3 party system. You can be sneaky and have another family member from the interested investor party put up the money but TTB and your state government is going to background check your funds. I agree with bob, best way to play is to play straight.

[cowdery]

I was told once by a non-participating shareholder in a distillery that she was prohibited from working as a waitress in a restaurant that served alcohol. On the other hand, having a few Diageo shares in your mutual fund doesn't prohibit you from doing anything, so I'm not sure where the line is.

On the other other hand, ask the Goldrings how they do it.

[Curtis McMillan]

Im not sure the federal government goes as nuts on the money background. The state is the big watch dog. If you have a tips card, if you have a liquor license on hand in that state. If you have income from anyone who does. That's how it bites you.

Just like anything goverment sometimes stuff slips through the cracks. Government will always catch up.