Why this might be a problem (from their brewers page):
When you brew with us, you brew for free. Just tell us the recipe youre going to use, and well buy the ingredients for you.
Gain an audience and get feedback. We ask for 40 12-ounce bottles from any 5 gallon batch you contribute, leaving you with about 10 bottles for personal use. Those 40 beers will be distributed to other Brewlab members, who will rate and comment on the beers they drink.
A regulatory entity might view this as the brewer selling beer to Brewlab. They give the brewer ingredients, the brewer give them beer. Depending on the definition of "Sell" or "Sale" in a state, this could count.
And why it might be a problem (from the FAQ page):
And this beer is free??
Yep! We're not in the business of selling beer. Two things about that though:
We can only cover the costs of brewing and running the organization with the help of membership donation, and so each batch we ask our members to consider donating to the cause.
The "donations" might be viewed as highly suspect by a regulatory body as well. If at any time I were to give them a donation in return for the beer they supply me, a regulatory body might view such as engaging in a sale. Again, depending on the rules and statutes in the state in question.
I know bupkis about CA law, so can't comment on the legality of the venture in CA. But if I were in CA and considering joining this group as a brewer or consumer, I'd at the very least check the language of the statutes for the definition of selling. I might consider talking to a CA attorney about it, too.
But I'm not, so all of the forgoing is just speculation, not legal advice.
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I'm very curious if we have any CA attorneys who might be able to provide insight into this matter.