Finding 2 - License to Pour: Access & Equity in Massachusetts Liquor Licensing Report

The 1978–1984 exemption window created an inequitable two-tier system: 26 municipalities with local control and 302 municipalities restricted by the state-imposed quota formula.

Of the 351 municipalities in Massachusetts, 26 are not subject to the quota formula for on-premises licenses.¹⁰¹ These 26 municipalities obtained control under legislation that authorized a limited group of municipalities to issue on-premises licenses irrespective of the quota.¹⁰² The window closed in 1985 with no subsequent opportunity for municipalities to obtain comparable quota flexibility.¹⁰³

The result is a two-tiered licensing system:

• Local-control municipalities: 26 municipalities that set their own on-premises license counts without reference to the quota formula, subject to local approval, ABCC review, and operating, enforcement, suspension, and revocation rules that apply to all on-premises licensees
• Quota municipalities: 302 municipalities that continue to be allocated on-premises licenses under the quota formula and may exceed that allocation only by securing special legislation from the Legislature, discussed in detail in Finding 4.

The two-tier system is the result of a historical eligibility rule. Only municipalities that had granted seasonal on-premises licenses before January 1, 1978, were eligible to become local-control municipalities. That rule favored places with established seasonal increases in population, so local-control municipalities are disproportionately Cape Cod, coastal, and Berkshire resort communities (see Figure 17 below). Notably, only 3 of the 26 Gateway Cities (Barnstable, Haverhill, and Worcester) are local-control municipalities.¹⁰⁴ This is particularly concerning where barriers to liquor license access may exacerbate the challenges already faced by Gateway Cities—municipalities that have been designated by the Commonwealth for targeted economic development.

Figure 17. Two-Tier Licensing System 

Coral outline is overlaid for 26 municipalities that are gateway cities on whatever fill is beneath. Local control municipalities concentrate on Cape Cod, the Islands and the South Coast. Gateway Cities are distributed across the state's older industrial centers, and almost all of them sit on blue filling which means that majority of Gateway Cities (23 out of 26) are quota-bound municipalities.

This Finding compares the two tiers of the Massachusetts liquor licensing system in two ways. First, it compares the number of on-premises licenses local-control and quota municipalities issue per 10,000 residents. Second, it applies the quota formula to the 26 local-control municipalities to calculate how many licenses those municipalities would be allocated if the state-imposed population-based quota applied to them today.

Local-control municipalities issue approximately twice as many on-premises licenses per resident as quota municipalities, and they issue substantially more than the quota formula would have allocated to them.

This study’s analysis shows that local-control municipalities issue substantially more on-premises licenses than quota municipalities. The 26 local-control municipalities issue 21.5 on-premises licenses per 10,000 residents, compared with 10.9 in the quota municipalities—twice as many licenses per resident (see Figure 18 below).¹⁰⁵ 

Figure 18. License Issuance, Local-Control vs. Quota Municipalities¹⁰⁶ 

The top horizontal bar represents the 26 local control municipalities, and it extends out to 21.5 licenses per 10,000 residents. The bottom horizontal bar represents the 302 quota bound municipalities, and it extends out to 10.9 licenses per 10,000 residents. The two horizontal bars show the middle value (median) for how many on-premises licenses are given out for every 10,000 residents. There is an annotation of “2.0x” positioned between the two horizontal bars to highlight how local control municipalities issue twice as many liquor licenses per resident as quota bound municipalities.

The gap in license issuance between quota municipalities and local-control municipalities is powered by local-control municipalities as a group and not driven by a small number of high-issuing local-control outliers.¹⁰⁷ 

To illustrate differential outcomes between the two tiers, this study compared quota municipalities at or above 80% license utilization with local-control municipalities of comparable population across various population levels.¹⁰⁸ Figure 19 on the next page compares the quota municipality’s allocated licenses under the formula with its local-control peer’s issued licenses. Allocated licenses provide the appropriate benchmark for quota municipalities because they represent the maximum number of licenses quota municipalities may issue without special legislation and approximate the limits local-control municipalities would face if subject to the quota formula. Figure 19 illustrates that local-control municipalities issue 1.5 to 2.4 times as many on-premises licenses per resident as the quota allocates, further evidencing that demand outpaces allocation under the formula.¹⁰⁹ 

Figure 19. Matched-Pair Comparison of Local-Control and Constrained Quota Municipalities¹¹⁰

The gap in licenses is printed beside each pair. From top to bottom, the numbered comparisons are: 1. Cambridge has 1.7x more licenses per resident than Quincy 2. Plymouth has 1.5x more licenses per resident than Waltham 3. Barnstable has 1.7x more licenses per resident than Peabody 4. Falmouth has 1.8x more licenses per resident than Dracut 5. Nantucket has 2.4x more licenses per resident than Wilbraham and 6. Lenox has 2.2x more licenses per resident than Hadley. From the above pairs, every quota municipality's allocation clusters strictly between 12.7 and 13.8 licenses per 10,000 residents regardless of its size, except for the smallest outlier Hadley at 36.0 licenses per 10,000. In contrast, their population matched local control counterparts vary widely and sit much higher, ranging from 20.0 up to 79.0 licenses per 10,000 residents.

Applying the quota formula to local-control municipalities shows the practical value of local-control authority.

Having established the gap in license access by comparing matched-pair local-control and constrained quota municipalities, the analysis now considers how local-control municipalities would have been limited by the quota formula. If the quota formula applied, the 26 local-control municipalities would have been allocated a combined total of 1,205 on-premises licenses (hypothetical quota allocation).¹¹¹ Under local control, those 26 municipalities actually issue 1,562 on-premises licenses, 357 (30%) more licenses than the quota formula would have allocated.¹¹²

Twenty-one of the 26 local-control municipalities issue more on-premises licenses than the quota formula would have allocated. In Figure 20 on the next page, each row compares the hypothetical quota allocation with licenses currently issued by each local-control municipality. The figure illustrates the benefit of local control versus the limitations of the quota formula, both by raw numbers and percentages. By raw numbers, Cambridge (+104 licenses above the hypothetical quota allocation), Plymouth (+46), Barnstable (+43), and Falmouth (+35) have benefited the most from local control.¹¹³ By percentages, the gap between hypothetical quota allocation and currently issued licenses is widest in smaller resort communities like Nantucket (+135%), Great Barrington (+121%), Lenox (+111%), and Provincetown (+89%), which have benefited substantially from their local control status.

Figure 20. Hypothetical Quota Allocation vs. Currently Issued Licenses for Local-Control Municipalities

From top to bottom, the simplified breakdown is: • High-Impact Increases (Rows 1-4) show major commercial hubs and popular coastal destinations show substantial expansions over formula limits, led by Cambridge (104 licenses more, or a 68% increase), followed by Plymouth (46 more, or a 54% increase), Barnstable (43 more, or a 68% increase), and Falmouth (35 more, or an 83% increase). • Resort and Tourist Hubs (Rows 5-10) show smaller, seasonal economies drastically exceed standard caps to meet local hospitality demands, including Nantucket (27 more, or a 135% increase), Great Barrington (23 more, or a 121% increase), Newburyport (21 more, or an 88% increase), Lenox (21 more, or a 111% increase), Dennis (17 more, or an 85% increase), and Provincetown (17 more, or an 89% increase). • Moderate to Slight Increases (Rows 11-21) display eleven communities that maintain modest additions above formula expectations, ranging from Marlborough (15 more, or a 28% increase) and Sturbridge (15 more, or a 79% increase) down to Dartmouth (1 more, or a 2% increase). • Negative Gaps (Rows 22-26) are observed in only five local-control communities that operate below what the state quota would allow, starting with a minimal gap in Pembroke (1 less, or a 4% decrease) and sliding down to larger deficits in Middleborough (8 less, or a 27% decrease), Franklin (11 less, or a 26% decrease), Haverhill (24 less, or a 28% decrease), and Worcester (29 less, or an 11% decrease). Across the data, 21 municipalities issue more licenses than the state limit, providing a combined surplus of 430 additional licenses. In contrast, only 5 municipalities issue fewer licenses, leaving a combined deficit of 73 fewer licenses. This brings the net overall impact across all 26 towns to 357 more licenses than a strict state quota would allow. The most dramatic percentage gaps belong to small resort towns like Nantucket, Great Barrington, and Lenox, where local control allows them to break past standard state caps to satisfy heavy tourist demand.

The analysis also demonstrates that local-control municipalities exercise discretion and that local control does not automatically lead to license issuance beyond what the quota formula would have allocated. In fact, five local-control municipalities—Franklin, Haverhill, Middleborough, Pembroke, and Worcester—issue fewer on-premises licenses than the quota formula would allow.

The hypothetical quota allocation analysis shows the benefit of local control in responding to local conditions. Officials and business operators in local-control municipalities describe this authority as a practical economic-development asset, allowing a community to calibrate license supply to downtown recovery, tourism, transit-oriented development, and seasonal demand rather than to a fixed resident count. A Cambridge restaurant owner stated that “the field feels leveled in Cambridge,” referring to the equal opportunity for obtaining a license in local-control Cambridge versus trying to obtain a license in a constrained quota municipality.¹¹⁴ A Haverhill municipal employee wrote that “local governments have a clearer understanding of their community’s needs than the state legislature and are better equipped to determine what works best and fits their community’s needs,” and a Nantucket official noted that “a little more flexibility to allow more or less on-premise licenses by the municipality would be very useful.”¹¹⁵

Local-control municipalities that have issued licenses in excess of what the quota would have allocated were able to do so without needing special legislation. In contrast, quota municipalities—particularly constrained quota municipalities—are subject to the lengthy, complicated, and uncertain home rule petition process. In the absence of special legislation via the home rule petition process, prospective licensees may be forced to rely on an expensive secondary market or reconsider location, negatively impacting economic growth in quota municipalities. Finding 4 discusses these barriers in further detail.

In summary, the 1978–1984 exemption window created an inequitable two-tier system: local-control municipalities that manage their own on-premises license supply and quota municipalities that must request permission from the Legislature for additional on-premises licenses. Municipalities that were able to take advantage of the temporary exemption window have experienced more than four decades of local flexibility, unlike quota municipalities that cannot freely respond to changing demand driven by factors such as tourism, commercial activity, downtown redevelopment, and strategic planning.

101.      ABCC fiscal year 2024 annual quota reports; the 26 local-control municipalities are listed in Appendix B.

102.      St. 1978, c. 377, § 2 (authorizing municipalities that had granted seasonal on-premises licenses before January 1, 1978, and voted to accept the original MGL c. 138, § 17A, to issue on-premises licenses irrespective of the § 17 quota; that exemption is now preserved by MGL c. 138, § 17C, the current § 17A having been substituted by St. 1984, c. 491).

103.      St. 1984, c. 491 (effective January 9, 1985), preventing municipalities that had not accepted the original MGL c. 138, § 17A, before January 1, 1985, from doing so thereafter; the grandfathered exemption for municipalities that had accepted it is codified at MGL c. 138, § 17C. If the window were open today with the same criteria, there would be 66 quota municipalities eligible because they issue seasonal licenses, 44% of which are currently constrained (having already issued 80% or more of their allocated licenses). Notably, this is more than double the 21% of overall quota municipalities that are constrained.

104.      MGL c. 23A, § 3A. Twenty-six Gateway Cities are currently designated; three (Barnstable, Haverhill, Worcester) operate under local-control authority and 23 remain subject to the § 17 quota formula.

105.      The 21.5 and 10.9 amounts are medians. This study reports the median rather than the average because a small number of very small municipalities receive disproportionately high per-resident allocations and would inflate a simple average. 

106.      Calculations are based on median values; includes special legislation and other exception licenses to compare total licenses in use. This is an on-the-street access measure: A special legislation or other exception license serves customers the way a quota formula license does.

107.      Analysis of the ABCC fiscal year 2024 annual quota reports, the ABCC fiscal year 2024 active-license extract, and 2023 US Census population: Three local-control municipalities sit far above the rest on licenses issued per 10,000 residents— Provincetown (97.1), Lenox (79.0), and Great Barrington (58.4), each a small resort community for which the service population greatly exceeds the resident population. Excluding all 3, the 23 remaining local-control municipalities issue a median of 20.0 on-premises licenses per 10,000 residents against 10.9 in quota municipalities, a ratio of 1.84 to 1 compared with 1.97 to 1 for the full group of 26. The difference remains statistically significant (Mann-Whitney U = 5,384, p < 0.001). The comparison is therefore not an artifact of the three highest municipalities.

108.      Constrained quota municipalities—those issuing at 80% or more of their § 17 allocation—were selected for the matched-pair comparison to provide the closest comparison: Because these municipalities face a binding quota constraint, contrasting their issuance with that of demographically similar local-control municipalities isolates the effect of the quota itself. See Appendix B for matched-pair methodology.

109.      Each local-control municipality is paired with the nearest-population constrained quota peer. The 26 local-control municipalities include none with populations between approximately 66,000 and 118,000; pairs are therefore shown at the population sizes that exist. A note on what these comparisons can and cannot show: Eligibility for the 1978–1984 window turned on prior seasonal licensing, so the 26 local-control municipalities are disproportionately resort and tourism economies with strong restaurant demand. Their higher issuance therefore cannot be read as a causal estimate of what local control would produce elsewhere. What the comparison documents is narrower and sufficient: Municipalities with authority to respond to local demand do respond, expanding where demand supports it and holding back where it does not (5 of the 26 issue fewer licenses than the formula would allow), while quota municipalities facing documented demand cannot respond without an act of the Legislature.

110.      The local-control bars count licenses issued, including special legislation and other exception licenses. They are included because they are licenses in use, the supply that a resident or a prospective licensee actually encounters. The quota bars are the § 17 allotment, which never includes exceptions. Sensitivity analysis demonstrates that removing exception licenses from the local-control counts does not close the gap: Cambridge has 5 exception licenses among 257 issued; the rate falls from 21.7 to 21.3 per 10,000 residents, still 1.7 times Quincy’s allotment of 12.9. Falmouth has 4 exception licenses among 77 issued; the rate falls from 23.3 to 22.1, still 1.7 times Dracut’s allotment of 12.7. Plymouth has 13 exception licenses among 131 issued; the rate falls from 20.0 to 18.0, still 1.4 times Waltham’s allotment of 13.2. Across these three pairs the multiples are 1.5 to 1.8 times with exceptions included, and 1.4 to 1.7 times without them.

111.      To measure license access gap at a system level, the quota formula’s 19-license on-premises minimum (14 All-Alcohol and 5 Wine-and-Malt) and the per-1,000-resident schedule are applied to each local-control municipality’s 2023 population to compute the hypothetical quota allocation; full methodology appears in Appendix B.

112.      Hypothetical quota allocation analysis: Section 17 on-premises allocation computed as max (14, ⌈population/1,000⌉) + max (5, ⌈population/5,000⌉) for each local-control municipality at the population recorded in DLM’s dataset. Aggregate across the 26 local-control municipalities = 1,205 licenses; aggregate currently issued = 1,562 licenses. Full methodology appears in Appendix B. Currently issued counts include exception licenses, consistent with the license-access metric used throughout Findings 2 and 3. Local-control municipalities issue on-premises licenses without special legislation; the special legislation (home rule) relief available to quota municipalities is examined separately in Finding 4. Population figures for all per-resident rates and the hypothetical quota allocation analysis are the 2023 municipal population estimates published by the Department of Revenue, Division of Local Services, Data Analytics and Resources Bureau, “Population By Municipality and Year,” Municipal Databank, accessed September 13, 2026, https://dlsgateway.dor.state.ma.us/reports/rdPage.aspx?rdReport=Socioeconomic.Population.Population. These figures are the US Census Bureau’s annual Population Estimates Program estimates for July 1, 2023—US Census Bureau, Vintage 2023 Population Estimates: City and Town Population Totals, Massachusetts, released May 2024, https://www.census.gov/newsroom/press-kits/2024/subcounty-population-estimates.html.

113.      Per-municipality gap analysis, on-premises licenses, ABCC fiscal year 2024 annual quota reports.

114.      DLM Interviews, 2026.

115.      DLM Survey, 2025–2026.

Date published:	October 13, 2026