The kegs have runneth dry for an alcohol-delivery service that opened up shop in the District last month.
The city’s alcohol board has ordered the online booze-delivery company Ultra to halt its service inside the city limits.
A cease-and-desist letter issued Wednesday by the Alcoholic Beverage Control Board cited Ultra for illegally selling alcoholic beverages without a license. The company had partnered with a Dupont Circle liquor store to allow customers to buy alcohol on Ultra’s website and then have the purchases delivered within an hour.
While licensed liquor stores are permitted to sell alcohol online and deliver it, there is no way to license a third-party vendor to do so, said Jessie Cornelius, spokeswoman for the D.C. Alcoholic Beverage Regulation Administration.
Third-party vendors can connect liquor stores and customers as long as they do not “sell the products to customers, charge the customers’ credit cards or otherwise collect funds from the customer or deliver the products to customers,” she said.
“We are going to connect with ABRA to understand how we can operate within the existing model,” said Mr. Shah, whose company first began delivering alcohol in New York last year.
He believes the problem comes down to the fact that Ultra was processing the credit card transactions for the liquor stores, in essence acting as the actual seller of the booze. In other jurisdictions, such as Silver Spring, where Ultra also operates, the transaction works differently with the store selling the alcohol being the one to process the purchase transaction.
Mr. Shah said his company hasn’t run into such problems in other jurisdictions because other localities have laws on the books explaining how to handle such online transactions.
“In some states, such as California and Texas, they have clear laws for Internet transactions for what we can or cannot do,” he said. “We hope to create some sort of a dialog with ABRA to understand their requirements as well.”