Granite City Restaurant features a full Bar and Brewery and has a growing amount of Restaurant and Bar locations in Cedar Rapids, Clive, Creve Coeur, Davenport, Eagan, East Peoria, Fargo, Fort Wayne, Kansas City, Lincoln, Madison, Maple Grove, Olathe, Omaha, Orland Park, Rockford, Rogers, Roseville, Sioux Falls, St. Cloud, St. Louis Park, Toledo, West Wichita, Wichita, Indianapolis, and South Bend.

Granite City Food & Brewery Announces $8.5 Million Private Financing

MINNEAPOLIS, September 17, 2004 - Granite City Food & Brewery Ltd. (Nasdaq: GCFB) today announced that it has entered into a securities purchase agreement with accredited investors for the sale of approximately $8.5 million of common stock and warrants.

The securities will be sold at an offering price of $3.25 per share of common stock, with one warrant for every 2.5 shares of common stock sold. The warrants will have a term of five years and will be exercisable at $5.00 per share, subject to certain anti-dilution adjustments. The Company anticipates an initial closing within the next three business days on shares and warrants representing 19.9% of Granite City's outstanding common stock before the issuance. Completion of the sale of the remaining shares and warrants will be subject to approval by Granite City's shareholders in compliance with Nasdaq Marketplace Rules. Granite City has agreed to register the common stock and the shares underlying the warrants under applicable federal and state securities laws.

The net proceeds of the financing will be used as working capital to fund expansion of Granite City's eight-store restaurant chain.

The foregoing securities have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

CONTACT:
Steven J. Wagenheim
President and Chief Executive Officer
(952) 525-2070 or (612) 751-3331