Can a corporation or LLC own both a beer wholesaler and a wine-and-spirits wholesaler in Oklahoma after the 2025 statutory amendment, even though the Oklahoma Constitution restricts who can own a wine-and-spirits wholesaler license?

Plain-English summary

In 2025, the Oklahoma Legislature passed Senate Bill 1031, which amended Title 37A to add a new subsection: "A beer distributor licensee and wine and spirits wholesaler licensee under common ownership shall not be limited in the types of business entities which may obtain a wine and spirits wholesaler license." 37A O.S. § 2-146(B).

That language put the new statute in apparent tension with article XXVIII-A, section 4(B) of the Oklahoma Constitution, which restricts wine-and-spirits wholesaler licenses to sole proprietors or partnerships meeting a five-year residency requirement, and expressly bars "a corporation, limited liability company or similar business entity" from holding such a license. Senate Majority Floor Leader Julie Daniels asked the Attorney General whether the statute violates the Constitution.

Attorney General Drummond's answer: the statute is constitutional. Section 4(B)'s entity-type and residency restrictions apply "except as otherwise provided in this section." Section 4(D) is one of those exceptions: it provides that "[a] wholesaler of beer shall not be subject to any residency requirements and shall not be limited in the types of entities which may own such wholesalers." Read together, the AG concluded that a beer wholesaler that also holds a wine-and-spirits wholesaler license carries the section 4(D) exemption with it, so the entity-type bar in section 4(B) does not apply.

The opinion also answered a second question from Senator Daniels: whether the ABLE Commission can deny a license application that satisfies all statutory requirements simply because the agency thinks the statute is unconstitutional. The answer is no. The ABLE Commission is an administrative agency, and Oklahoma law is clear that "as an administrative agency, it is powerless to strike down a statute for constitutional repugnancy" (Dow Jones & Co. v. Oklahoma Tax Comm'n, 1990 OK 6).

This means the ABLE Commission must apply the new common-ownership provision unless and until a court invalidates it.

What this means for you

If you operate a beer wholesaler in Oklahoma

You can now also obtain a wine-and-spirits wholesaler license without restructuring your corporate form. You do not have to dissolve into a partnership or sole proprietorship. The corporation or LLC that holds your beer wholesaler license can hold the new wine-and-spirits license too.

Coordinate with the ABLE Commission and your attorneys to file the wine-and-spirits license application. Include documentation showing common ownership of the beer wholesaler license, since that is what triggers the section 4(D) exemption.

If you operate a wine-and-spirits wholesaler organized as a sole proprietorship or partnership

Nothing in the 2025 amendment forces you to change. You can continue to operate as you are. The new flexibility is for entities that already hold beer wholesaler licenses; it does not require existing wine-and-spirits wholesalers to consolidate or convert.

If you want to expand to also hold a beer wholesaler license, the existing 37A O.S. § 2-146(A)(15) framework already allowed cross-tier flexibility for beer distribution. The 2025 amendment specifically opens corporate-form flexibility on the wine-and-spirits side when there is common ownership with a beer wholesaler.

If you sit on the ABLE Commission or work for the agency

Apply the law as written. The opinion is direct: you cannot deny a license application that meets all statutory requirements based on your own view that the statute is unconstitutional. Constitutional review is a court function, not an agency function. If a court ultimately invalidates 37A O.S. § 2-146(B), the agency can adjust then; until then, applications complying with the amended statute are entitled to be processed under the new framework.

If you advise the alcohol distribution industry

Two practical takeaways:

• The opinion legitimizes a long-anticipated consolidation pathway. Beer wholesalers organized as corporations or LLCs can now also serve as wine-and-spirits wholesalers without restructuring. Expect M&A activity reflecting this.
• The opinion does not address retail spirits licenses. The 2025 amendment expressly excluded retail spirits "due to the need for strict liability related to sales directly to consumers and in the interest of public safety." Three-tier separation between wholesale and retail remains intact.

If you are an Oklahoma legislator

The opinion validates your 2025 SB 1031 amendment as constitutional. The reasoning hinges on reading section 4(D) as an exception to section 4(B) that includes beer wholesalers' wine-and-spirits cross-licenses. If a court reads section 4(D) more narrowly (as exempting only the beer license itself), the statute could be challenged. If you want belt-and-suspenders certainty, a constitutional amendment to expressly authorize common ownership would foreclose the issue.

If you are a retailer or consumer

This opinion does not directly affect retailers or consumers. Wholesale-tier consolidation may produce indirect price or selection effects over time, but those are market questions, not legal ones. Retail spirits licenses retain their existing entity-type restrictions per the 2025 amendment.

Common questions

Q: What did the 2025 amendment to 37A O.S. § 2-146 do?
A: It added subsection (B) providing that a beer distributor licensee and wine-and-spirits wholesaler licensee under common ownership are not limited to particular business entity types for the wine-and-spirits license. The amendment expressly excludes retail spirits licenses.

Q: Why did this require AG analysis?
A: Because article XXVIII-A, section 4(B) of the Oklahoma Constitution generally bars corporations, LLCs, and similar entities from holding wine-and-spirits wholesaler licenses. The question was whether the new statute violated that provision.

Q: How did the AG conclude the statute is constitutional?
A: By reading section 4(B) and section 4(D) together. Section 4(B)'s restrictions apply "except as otherwise provided in this section." Section 4(D) categorically exempts beer wholesalers from any restrictions on entity type. The AG read section 4(D) as carrying that exemption to a beer wholesaler's wine-and-spirits cross-license.

Q: Can the ABLE Commission refuse to issue a license under the new statute?
A: Only for cause grounded in the statutory licensing requirements, not based on the agency's own constitutional concerns. The Commission must apply the law as written.

Q: Does this affect retail spirits licenses?
A: No. The 2025 amendment expressly excluded retail spirits licenses, which face stricter rules due to direct consumer sales.

Q: What is the three-tier alcohol distribution system?
A: Oklahoma's alcohol regulation under article XXVIII-A separates manufacturers (first tier), wholesalers (second tier), and retailers (third tier). Wholesalers can sell only to retailers, retailers can sell only to consumers, and manufacturers cannot sell direct. The 2025 amendment is entirely within the second tier.

Q: Could a future Legislature undo this?
A: Yes. The Legislature can amend or repeal 37A O.S. § 2-146(B). What the Legislature cannot do is amend article XXVIII-A; that requires a vote of the people, just as State Question 792 created article XXVIII-A in 2016.

Q: Could a court invalidate the 2025 amendment?
A: Only if a court reads section 4(D) more narrowly than the AG did and concludes that section 4(B)'s entity restrictions reach beer wholesalers' wine-and-spirits cross-licenses despite the section 4(D) exemption. The AG's reading is the more text-consistent one, and Oklahoma courts strongly presume statutes constitutional.

Background and statutory framework

Oklahoma repealed alcohol prohibition in 1959. The current regulatory framework dates to State Question 792, which Oklahoma voters adopted overwhelmingly in 2016 and which took effect October 1, 2018. SQ 792 repealed the old article 28 of the Constitution and replaced it with article XXVIII-A. The Legislature passed companion legislation in Title 37A, the Oklahoma Alcoholic Beverage Control Act, to implement the new constitutional framework.

Article XXVIII-A, section 4 sets out who can obtain various alcohol licenses:

• Section 4(B) restricts wine-and-spirits wholesaler licenses to sole proprietors or partnerships meeting a five-year residency requirement; expressly bars corporations, LLCs, and similar business entities. Restrictions apply "except as otherwise provided in this section."
• Section 4(C) allows a wine-and-spirits wholesaler to enter agreements with otherwise-prohibited corporate entities under specified conditions.
• Section 4(D) provides: "The provisions of subsection B of this section shall not apply to beer wholesalers. A wholesaler of beer shall not be subject to any residency requirements and shall not be limited in the types of entities which may own such wholesalers."

The 2025 amendment to 37A O.S. § 2-146(B) operationalized section 4(D)'s text in a specific way: when one entity owns both a beer wholesaler and a wine-and-spirits wholesaler, the entity-type restrictions of section 4(B) are inapplicable to the wine-and-spirits side. The opinion's main move is to argue that the Constitution permits this reading. The AG cites canonical statutory-construction rules: read provisions together, avoid reading words as redundant, presume legislative enactments constitutional unless "clearly, palpably and plainly" inconsistent with the Constitution.

The opinion is also a primer on agency authority. Oklahoma courts have repeatedly held that administrative agencies cannot adjudicate the constitutionality of statutes. See Dow Jones & Co. v. Oklahoma Tax Comm'n, Strelecki v. Oklahoma Tax Comm'n. The ABLE Commission is no exception. It must apply the law and issue licenses to applicants who meet statutory criteria. If the Commission believes a statute is unconstitutional, the path is litigation by an affected party, not unilateral agency refusal.

Citations and references

Constitutional provisions:
- Okla. Const. art. XXVIII-A, § 4 (wholesaler licensing)

Statutes:
- 37A O.S. §§ 1-101 to 8-101 (Oklahoma Alcoholic Beverage Control Act)
- 37A O.S. § 2-146 (Wholesaler license requirements)
- 37A O.S. § 1-107 (ABLE Commission powers)
- 37A O.S. § 2-108 (Beer distributor licenses)

Session law:
- 2025 Okla. Sess. Laws ch. 422, § 1 (SB 1031)

Cases:
- Inst. for Responsible Alcohol Pol'y v. ABLE Comm'n, 2020 OK 5, 457 P.3d 1050
- Dow Jones & Co. v. Oklahoma Tax Comm'n, 1990 OK 6, 787 P.2d 843
- Strelecki v. Oklahoma Tax Comm'n, 1993 OK 122, 872 P.2d 910

Source

• Landing page: https://oklahoma.gov/oag/opinions/ag-opinions/2025/20.html
• Original PDF: https://oklahoma.gov/content/dam/ok/en/oag/opinions/ag-opinions/2025/AG%20Opinion%202025-20.pdf

Original opinion text

OFFICE OF THE ATTORNEY GENERAL
STATE OF OKLAHOMA
ATTORNEY GENERAL OPINION
2025-20

The Honorable Julie Daniels
Majority Floor Leader
Oklahoma State Senate, District 29
2300 N. Lincoln Boulevard, Room 421
Oklahoma City, OK 73105

December 18, 2025

Dear Leader Daniels:

This office has received your request for an Attorney General Opinion in which you ask, in effect, the following questions:

1. Does title 37A, section 2-146(B) of the Oklahoma Statutes, which provides that a wine-and-spirits wholesaler under common ownership with a beer wholesaler is not subject to the limitations on business type that would otherwise apply to the wine-and-spirits wholesaler in the absence of such common ownership, conflict with limitations set forth in article 28A, section 4 of the Oklahoma Constitution?
2. May the Oklahoma Alcoholic Beverage Laws Enforcement Commission ("ABLE Commission") deny a license application that complies with all statutory requirements based on the agency's belief that the Oklahoma statute providing such requirements is unconstitutional?

I. SUMMARY

Earlier this year, the Legislature amended the Oklahoma Alcoholic Beverage Control Act, 37A O.S.2021 & Supp.2025, §§ 1-101 to 8-101, to provide that corporations, limited liability companies, and similar business entities that hold a beer wholesaler license are also eligible to hold a wine-and-spirits wholesaler license. See Senate Bill 1031, 2025 Okla. Sess. Laws ch. 422, § 1. At its core, your first question asks whether the new legislation violates the Oklahoma Constitution. The answer is no.

Under article XXVIII-A, section 4 of the Oklahoma Constitution, only a sole proprietor or partnership may be issued a wine-and-spirits wholesaler license. But the limitation is not absolute: section 4(B) expressly authorizes certain exceptions by reference to provisions found later in section 4. Relevant to your question, section 4(D) categorically exempts beer wholesalers from any restrictions on entity ownership. Harmonizing the two subsections, a wine-and-spirits wholesaler licensee that shares common ownership with a beer wholesaler is entitled to the benefit of section 4(D), meaning that the common owner of both wholesalers may be a corporation, limited liability company, or similar business entity.

Next, Oklahoma caselaw definitively answers your second question. As an administrative agency, the ABLE Commission lacks authority to adjudicate the constitutionality of legislation and therefore may not decline to issue a wholesaler license because of its own view of the constitutionality of licensing statutes.

II. BACKGROUND

Oklahoma repealed alcohol prohibition in 1959, when the state's voters amended the Oklahoma Constitution to approve alcohol sales. In 1984, Oklahomans adopted further constitutional changes that included the establishment of the present-day ABLE Commission. The ABLE Commission "is the body generally charged with enforcement of the alcoholic beverage laws of Oklahoma." Ledbetter v. Okla. Alcoholic Beverage Laws Enf't Comm'n, 1988 OK 117, ¶ 2, 764 P.2d 172, 175.

The 1984 constitutional amendments also created "Oklahoma's three-tier system for alcohol distribution," under which "alcohol manufacturers (first tier) can only sell to licensed Oklahoma wholesalers (second tier); licensed Oklahoma wholesalers (second tier) can only sell to licensed retailers (third tier); and licensed retailers (third tier) can only sell to consumers." Inst. for Responsible Alcohol Pol'y, 2020 OK 5, ¶ 3, 457 P.3d at 1052. This Opinion deals only with the second tier, wholesalers, which "are not allowed to sell or ship direct to consumers" and which "must . . . obtain licenses through the state."

Additional major changes to alcohol regulation came in 2016, when "the Oklahoma Legislature passed a joint resolution to place State Question 792 on the November 2016 ballot." The people of Oklahoma overwhelmingly adopted State Question 792, and "it went into effect on October 1, 2018." While the ABLE Commission remains, "State Question 792 repealed Article 28 of the Oklahoma Constitution, replacing it with Article 28A and fundamentally changed how Oklahoma regulates the sale and distribution of alcohol." "The Legislature also passed companion legislation in Title 37A of the Oklahoma Statutes to create Oklahoma's new alcohol regulatory scheme."

Relevant here, section 4 of Article XXVIII-A limits who may obtain retail spirits licenses, wine-and-spirits wholesaler licenses, and beer wholesaler licenses. The companion legislation enacted in title 37A, section 2-146 of the Oklahoma Statutes enumerates the grounds upon which the ABLE Commission shall grant or deny those licenses. As previously stated, the Legislature amended section 2-146 during the 2025 session to add a new subsection with the following language: "A beer distributor licensee and wine and spirits wholesaler licensee under common ownership shall not be limited in the types of business entities which may obtain a wine and spirits wholesaler license." 37A O.S.Supp.2025, § 2-146(B). The amendment also provides that "[n]othing in this subsection shall be construed to apply to a retail spirits license due to the need for strict liability related to sales directly to consumers and in the interest of public safety."

III. DISCUSSION

A. Article XXVIII-A, section 4 of the Oklahoma Constitution does not restrict the types of business entities that may obtain a wine-and-spirits wholesaler license when sharing common ownership with an exempt beer wholesaler.

Your first question concerns the interpretation of the state constitution. Article XXVIII-A, section 4 of the Oklahoma Constitution limits who may obtain various licenses to sell alcohol. It contains five subsections. Relevant to your question, section 4(B) sets out two limitations on who may obtain a wine-and-spirits wholesaler license. First, a license "shall only be issued to a sole proprietor who has been a resident of this state for at least five (5) years immediately preceding the date of application for such license, or a partnership in which all the partners have satisfied the same residency requirement." Second, a license "shall not be issued to a corporation, limited liability company or similar business entity." Each of these two limitations is subject to the caveat: "except as otherwise provided in this section." That is, the residency and entity-type limitations for a wine-and-spirits wholesaler license do not apply where otherwise stated in section 4.

Both sections 4(C) and (D), in turn, provide exceptions to the broad limitations of section 4(B). For its part, subsection 4(C) allows a wine-and-spirits wholesaler licensee to "enter into an agreement with a corporation, limited liability company or similar business entity that would otherwise be prohibited from obtaining a license in this state under this section," so long as certain conditions are met. Pertinent to your inquiry, section 4(D) provides that the limitations contained in section 4(B) do not apply to beer wholesalers. It states in full: "The provisions of subsection B of this section shall not apply to beer wholesalers. A wholesaler of beer shall not be subject to any residency requirements and shall not be limited in the types of entities which may own such wholesalers."

When viewed together, the meaning of sections 4(B) and (D) is clear. Section 4(B) imposes restrictions on who may obtain a wine-and-spirits wholesaler license. It says nothing of any other license in the alcohol industry. Section 4(D), meanwhile, provides that the restrictions of section 4(B) "shall not apply to beer wholesalers." But under the plain terms of section 4(B), those restrictions apply only to wine-and-spirits wholesalers, and no other purveyors of alcohol, in the first place. Given that, it is reasonable to conclude that section 4(D) applies to beer wholesalers who wish to also obtain a wine-and-spirits wholesaler license. Otherwise, the prefatory sentence of section 4(D) would serve no textual purpose. "[C]ourts avoid a reading that renders some words altogether redundant." Under article XXVIII-A, section 4, the holder of a beer wholesaler license may also hold a wine-and-spirits wholesaler license while remaining exempt from the entity-ownership restrictions otherwise required by section 4(B).

Based on this conclusion, the 2025 legislation amending title 37A, section 2-146(B) does not violate the constitutional limitations found in article XXVIII-A, section 4. This is consistent with the rule that "[w]henever possible, statutes should be construed so as to uphold their constitutionality." Reherman v. Okla. Water Res. Bd., 1984 OK 12, ¶ 11, 679 P.2d 1296, 1300. In determining whether a legislative act is constitutional, "we do not look to the Constitution to determine whether the Legislature is authorized to do an act but rather to see whether it is prohibited." Additionally, any "[r]estrictions and limitations upon legislative power are to be construed strictly." Draper v. State, 1980 OK 117, ¶ 10, 621 P.2d 1142, 1146.

Other provisions within title 37A of the Oklahoma Statutes likewise lend support to this interpretation. From the time of its original enactment in 2016, title 37A, section 2-146(A)(15) has stated that "nothing shall prohibit a wine and spirits wholesaler, who is otherwise qualified, from maintaining beer distributor licenses in the state, nor a beer distributor, who is otherwise qualified, from maintaining a wine and spirits wholesaler license in the state." And section 2-108, pertaining to beer distributor licenses, similarly provides that "if the beer distributor transports wine and spirits, a valid wine and spirits wholesaler license must be maintained by the beer distributor or affiliated entity having common ownership with the licensed beer distributor." With the 2025 amendment to section 2-146, the Legislature has now made clear that, in such cases of common ownership, the general restrictions on residency and entity ownership will not apply.

As explained above, Oklahoma courts "will uphold a duly enacted statute unless it is 'clearly, palpably and plainly' inconsistent with the Constitution." Accordingly, the Legislature's 2025 amendment to section 2-146(B) does not violate article XXVIII-A, section 4 of the Oklahoma Constitution.

B. The ABLE Commission may not deny a license application based on the agency's belief that the Oklahoma statute providing such requirements is unconstitutional.

Next, you ask whether the ABLE Commission may deny a license application that complies with all statutory requirements, solely based on the agency's belief that the Oklahoma statute providing such requirements is unconstitutional. Under title 37A of the Oklahoma Statutes, the ABLE Commission has "the sole authority to issue any license" relating to the distribution of alcoholic beverages for the purpose of sale. 37A O.S.2021, § 1-107(A)(3). Oklahoma law requires any prospective wholesaler licensee to satisfy numerous statutory requirements and safeguards, the failure of any of which means that the ABLE Commission "shall refuse to issue" the license. 37A O.S.2021, § 2-146(A)(1)–(17). But the ABLE Commission may only "refuse to issue any license . . . for cause." Id. § 1-107(A)(4).

The ABLE Commission "is an administrative body." Okla. Admin. Code § 45:1-3-1. "[A]s an administrative agency, it is powerless to strike down a statute for constitutional repugnancy." Dow Jones & Co. v. State ex rel. Okla. Tax Comm'n, 1990 OK 6, ¶ 6, 787 P.2d 843, 845. Simply put, the "power assigned to boards and commissions is not coextensive with that which is vested in the courts." "Every statute is . . . presumed constitutionally valid until a court of competent jurisdiction," not the ABLE Commission or any other administrative body, "has declared otherwise." Strelecki v. Okla. Tax Comm'n, 1993 OK 122, ¶ 11, 872 P.2d 910, 917. As such, the ABLE Commission lacks the authority to decline to issue a license to an otherwise statutorily compliant applicant based on the Commission's own view of the statute's constitutionality. The ABLE Commission must apply the law as written until told otherwise by the courts.

It is, therefore, the official Opinion of the Attorney General that:

1. Article XXVIII-A, section 4 of the Oklahoma Constitution provides that the restrictions on the types of business entities that may hold a wine-and-spirits wholesaler license do not apply to beer wholesalers. This exemption for beer wholesalers includes those that also hold a wine-and-spirits wholesaler license. Accordingly, title 37A, section 2-146(B) of the Oklahoma Statutes, which provides that a wine-and-spirits wholesaler under common ownership with a beer wholesaler is not subject to the limitations on business type that would otherwise apply to the wine-and-spirits wholesaler in the absence of such common ownership, is constitutionally permissible.

2. Because the ABLE Commission lacks authority to adjudicate the constitutionality of legislation, it may not deny a license application that satisfies all applicable statutory requirements due solely to the agency's view that certain licensing statutes violate the Oklahoma Constitution.

GENTNER DRUMMOND
ATTORNEY GENERAL OF OKLAHOMA

CULLEN D. SWEENEY
ASSISTANT SOLICITOR GENERAL