New CA Law Gives Small Distilleries a Bigger Shot
Governor Brown just signed SB-1164
By Dave Hendrick
California Craft distillers are raising a glass to State Senator Nancy Skinner (D-Berkeley) this week after Governor Brown signed her bill, SB-1164, into law. The legislation, nicknamed the “Craft Distillers Op-pour-tunity Act” in an extra dry pun, expands the capacity allowed under existing Type 74 craft distillery licenses from 100,000 to 150,000 gallons of spirit production per year while also making it easier for consumers to get their hands on bottles made my small producers.
Under previous law, visitors to California craft distillery tasting rooms have been required to participate in tasting events before purchasing bottles of distilled spirits. For craft distilleries without the capacity to run tasting rooms, sales were outright impossible.
While tastings are popular, the old law was often a hindrance to sales, says Tim Obert, CEO and co-founder of San Francisco’s Seven Stills brewery and distillery. “We have people come in literally every day who just want to buy [spirits] bottles to go, and we’re currently required to only sell to people attending a tour or paid tasting, so loosening the language will help us drastically.”
According to Senator skinner, the new law “lets people purchase directly from our artisanal distillers, just like they’re able to from a winery.” Customers are still limited to purchasing 2.25 liters of spirits per day, or about three bottles.
The new legislation is particularly welcome as Seven Stills prepares to expand with a larger Mission Bay production facility. “It will be a a huge help for our new 100 Hooper project, where we plan to operate a large retail presence,” says Obert. “Requiring guests to taste before they buy adds a lot of labor and expense, and in general deters guests from buying bottles.”
According to Lance Winters, master distiller and president at Alameda’s popular St. George Spirits, “the laws around spirits, predominately around selling spirits, are draconian at their very best.” One minor example: Craft distillers, but not large spirits producers, were forbidden from donating spirits to charity events like fundraisers, a practice now legal under SB-1164.
While St. George produces under 100,000 gallons of products like its Terroir Gin and single malt whiskey, Winters is still in favor of the expanded capacity allowance. “As distributors are consolidating and getting bigger, you need to make a bigger splash in the pond,” he says. According to Senator Skinner, the new capacity is in line with craft distilling guidelines in other states.
Winters is grateful to Skinner for her legislative work, which was inspired by the senator’s friendship with beer and spirits producers like Seabright Brewery in Santa Cruz and Osocalis Distillery in Soquel.
“There’s so much influence in politics from large deep pocketed interests, so when someone takes an interest in small businesses, its refreshing and eye opening,” Winters says.