A co-founder of Colorado’s first brewpub, Gov. John Hickenlooper has a tough call to make in this year’s politically-charged alcohol debate. He must decide whether or not to give his executive approval to a bi-partisan bill passed by the legislature that proponents say would protect mom-and-pop liquor stores from having their businesses overrun by out-of-state grocery corporations. Bill proponents believe the legislation would prevent a ballot initiative from being run this year that, if passed by the voters, would allow grocery chain giants like Safeway and King Soopers to sell full-strength wine and beer in their stores.

The governor is meeting Thursday with backers of Senate Bill 197, and has to decide whether to sign the bill into law or veto it before a June 10 deadline. SB197 would allow large, chain grocery stores to each hold up to 20 liquor licenses over the next 20 years and an unlimited number after that, but it also requires grocery stores to buy licenses from any pre-existing, nearby liquor stores.

The bill’s main Senate sponsor, Sen. Pat Steadman, D-Denver, says that last requirement is necessary in order to protect the more than 1,600 liquor stores around the state that for nearly 90 years have been legislatively mandated to stay small, with just one retail liquor license and one store allowed per company or individual.

Your Choice Colorado, a group funded by Kroger (King Soopers, City Market) and Safeway, is gathering signatures for a ballot initiative that, if it passes in November, would allow the grocery chains to sell full-strength beer and wine at an unlimited number of locations next year. The stores can already sell beer with a 3.2-percent alcohol content as opposed to 6-percent-plus beer.

“You have whole families that invested for generations in these businesses and it seems really wrong to just change the rules of the road overnight,” Steadman told The Colorado Statesman. “Senate Bill 197 protects small business owners’ investments in their businesses and gives value to that license. They can sell it to a grocery store wanting to get a license rather than just be put out of business by competition from that grocery store.”

The Colorado Licensed Beverage Association spearheaded Steadman’s compromise bill that allows grocery chains five licenses in 2017, up to 20 by 2037 and an unlimited number after that. But the bill also requires a grocery store looking to acquire a liquor license to buy it from any liquor store within 1,500 feet of their store in the city or 3,000 feet in towns, and if there isn’t a liquor store within that boundary, the grocery store must buy out two other liquor stores.

“A grocery would have to buy out two liquor stores for an uncapped price, and that is simply a nonstarter – grocery stores can’t afford to do that,” Your Choice Colorado spokesman Matt Chandler said of SB197. “It’s actually worse than the status quo. It makes it even more onerous for people who might be looking to start small businesses or expand their small business – breweries, for example – in a whole lot of locations.”

But Steadman says his bill, which passed late in the session with overwhelming bipartisan support in both chambers, will allow plenty of transition time for mom-and-pop shops to either adjust their business models to include food or other specialty items or to simply sell their licenses to the big grocery chains and recoup their investments.

“We’ve legislated for these folks to always be small and vulnerable,” Steadman said, adding he believes the bill has the support of 90 to 95 percent of the state’s liquor stores. “It seems like the Legislature shouldn’t just throw them to the wolves and turn their backs on them now, and that’s what you saw with this legislation and that’s why it passed so handily.”

But Hickenlooper said late last week he’s hearing from many small liquor store owners who want to fight the big grocery chains at the ballot box. Steadman doesn’t see that as a wise move, because even though both he and the governor would prefer to maintain the state’s current liquor laws, Steadman feels change is inevitable.

“Even though most of us supporting this bill prefer to see the law left absolutely alone, there’s a realization that sooner or later something’s going to change in Colorado,” he said. “Grocery stores are going to win at the ballot or enough people will move here from other states that are used to different practices around liquor sales that there’s going to be a demand for change.”

Chandler said the worst thing SB197 does is subvert the will of the people.

“There’s a lot that is flawed with the bill, and one of the most disturbing parts of it is you have the will of the people whose voice is essentially being negated by this piece of legislation,” Chandler said. “We’re confident that we will prevail at the ballot box and feel that Colorado voters should have a voice.”

If SB197 is signed into law, Chandler said future legislatures will have to take corrective action if and when the Your Choice Colorado ballot initiative passes. Plus, he argues it should not be up to legislators and lobbyists to decide how Coloradans purchase their beer and wine.

“I don’t think it’s their right to be able to decide what Coloradans truly want,” Chandler said. “People want to have the convenience to one-stop shop and not have to take their kids in and out of the car twice. They should have the ability to do that if they so choose.”He said his group is rapidly closing in on the 98,000 signatures necessary to put the question on the ballot in November.

“As people learn what SB197 does, or more importantly doesn’t do, we’ve actually seen more people approaching us to sign the petition because they realize that [the bill] doesn’t give them the choices that they want, and it continues the protectionist culture that most other businesses don’t enjoy,” Chandler said.

Tom Mullen owns West Vail Liquor Mart, which is within 3,000 feet of both a City Market and a Safeway store in Vail. The 3,000-foot distance restriction applies to towns with populations of 10,000 or less.

“The reason we support SB197 is that it gives grocery stores an opportunity to enter the market in a scaled and tiered approach,” Mullen said. “Most Coloradans don’t realize that liquor store owners like us are limited to only one license, and the ballot initiative creates a new class of license that excludes us and gives [grocery stores] carte blanche to open as many as they desire, so it’s very lopsided.”

Dennis Leifheit, owner of Antlers Liquor and Wine Seller in Frisco, said the convenience argument is a smokescreen.

“This is a market-share gain ploy, an opportunity,” Leifheit said. “I don’t blame them. If I was running Safeway or City Market and I had to answer to stockholders, I’d be looking for vehicles for revenue growth as well. But it’s a camouflage thing that these guys are interested in consumer convenience, because they’re not.”

Chandler fires back that it really is all about convenience, and therefore Colorado voters ought to be able to decide in November and not be handcuffed by the Legislature.

“The biggest thing is [SB197] simply doesn’t accomplish what people want, and what they want is to be able to buy the Colorado beer and wine they love alongside food, and that’s not something this accomplishes in any real way,” Chandler said.