When California’s Assembly Bill 1246 (AB 1246) takes effect on January 1, 2026, it will mark a notable shift in how distilled spirits can reach consumers. Signed by Governor Gavin Newsom on October 3, 2025, the law gives both California craft distillers and certain out-of-state craft producers the opportunity to ship their spirits directly to California consumers—something previously prohibited under state law.

Under AB 1246, a licensed craft distiller in California, or a “qualifying out-of-state distiller” producing no more than 150,000 gallons annually, may ship up to 2.25 liters of spirits per day per consumer for personal use. The shipments must include clear “CONTAINS ALCOHOL” labeling and require an adult signature at delivery. Both in-state and out-of-state distillers must first obtain a Distilled Spirits Direct Shipper Permit from the Department of Alcoholic Beverage Control (ABC) and agree to file reports with ABC detailing the amount of spirits shipped in the prior year. Distilleries that ship direct to California consumers must also consent to the jurisdiction of the state of California concerning the enforcement of the state’s shipping laws.

For California distillers, the bill also expands on-premise privileges, doubling the amount they can sell directly to tasting-room visitors—from 2.25 liters to 4.5 liters per day. And in a smaller technical tweak, it clarifies that brandy may be transported between a distillery and a winegrower for aging, helping streamline cooperative production.

A Measured Step Toward Parity

Industry analysts view the bill as a cautious but meaningful step toward parity between the spirits and wine sectors. As noted by compliance firm Sovos ShipCompliant, the new framework mirrors the existing wine direct-shipper permit model and “brings craft distillers closer to the privileges that wineries have long enjoyed.” Beginning in 2026, consumers will be able to order craft spirits for home delivery within California, subject to the same quantity limits that apply to distillery tasting-room sales.

The legislation’s limited duration—set to expire on January 1, 2027—is designed to function as a pilot. During that one-year period, the ABC and Legislature will be able to assess shipment volumes, compliance rates, and potential enforcement issues before deciding whether to extend or amend the program.

Support and Opposition

Not everyone is celebrating. The Wine & Spirits Wholesalers of America (WSWA) and other distribution-tier groups have criticized AB 1246, arguing it could erode the integrity of the three-tier system. In comments reported by The Spirits Business, WSWA warned that widespread direct shipping might complicate tax collection, reduce regulatory visibility, and make it harder to prevent underage access.

Supporters, however, say the law’s strict guardrails—daily shipment caps, adult-signature requirements, and mandatory ABC permitting—protect against those risks while allowing small producers to reach customers who may never visit a distillery in person. To them, AB 1246 represents a modernization effort consistent with how consumers already purchase wine and beer online.

Looking Ahead

The impact of AB 1246 will depend largely on how many distillers take advantage of the new privileges and how effectively the ABC enforces compliance. If the pilot succeeds, California could become a model for other states exploring limited, regulated pathways for spirits e-commerce.

For now, producers and regulators alike will spend 2026 navigating uncharted territory: a one-year experiment that tests whether the convenience of direct-to-consumer shipping can coexist with the structure of the traditional three-tier system.

Calum d’Oelsnitz is an attorney representing members of all three tiers of the Beverage Alcohol Industry and member of The Danow Group, 605 Third Avenue, New York, NY 10158.  (212 3703744). Website: thedanowgroup.com; email:kd@thedanowgroup.com