How the Nevada craft distillery law affects businesses | nnbw.com

How the Nevada craft distillery law affects businesses

Michael Higdon
mhigdon@swiftcom.com

Tahoe Moonshine gin, Verdi Local whiskey, Tahoe Blue Vodka, Seven Trough’s rum, Churchill Vineyard’s brandy and Francovich’s Holiday Nog.

In Nevada, no one can buy more than two bottles per month of any liquor at a craft distillery. Why? Because of unenforceable liquor laws, that's why. #TheManWillGetYouDown

At The Depot Craft Brewery Distillery, the owners used 500-milllitre bottles (that turned out to be illegal too), so customers could buy three instead. At Verdi Local Distillery, owners started using 200-millilitre bottles so customers can buy seven instead. Both businesses the law really meant 1500 millilitres so they used math as a workaround.

On March 13, proposed changes to the Nevada Craft Distillery law will go into committee for approval before going into the house and senate. You can use a simple online form to tell the Nevada legislators what you think. Just click the link and find or type in "AB186" and select For or Against (comment optional).

So here's the changes and how they affect your day drinking. If you want more detail, scroll past the bullet points for a breakdown:

• Raise the two bottle, per person, per month limit to two cases (24 bottles), per product, per person, per month.

• Allow visitors to taste 2 ounces per spirit, per person, per day instead of just 2 ounces all together.

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• Allow craft distilleries to run an off-site tasting room or to give tastings and sell at special events (farmers markets, sporting events, etc.).

• Increase out-of-state export limit from 20,000 cases to 40,000 cases.

• Allow craft distilleries to directly donate to and transport alcohol to non-profit or charitable events.

"Passage of this bill will give Nevada's craft distilleries a better chance for success," wrote Tom Adams, owner of Seven Troughs Distilling Co. "This bill will allow us to have more direct interaction with our customers, increase excise tax revenue, promote job growth and will greatly help our local farmers."

Explanation of the changes

Two bottle limit – the unenforceable law

Proposal: Increase two bottles of anything per person, per month to two cases of each product, per person, per month.

Context: The two-bottle limit was added to the original bill at the last minute by a legislator who thought it was excessive to let people buy unlimited booze (clearly he had never been to a liquor store, which has no such limit). The law passed with no explanation for how the Nevada Department of Taxation was supposed to enforce this. Turns out no one in the Department of Taxation wants to go around collecting a bunch of legal pads full of names, phone numbers and purchases and then issue unspecified fines. They've got way better things to do. But all the distilleries follow and record it anyway, because they're not stupid and you never know when someone from the state will make an unnaccounced visit.

Fun fact: At least we're not California (said everyone. Distilleries there can't sell any liquor to anyone, any time. The two-bottle limit is common across the country, even Texas and Alaska had to fight hard just to get two bottles recently. Kentucky and Tennessee, states full of heavy drinkers and bourbon, also limit in-distillery bottles (Kentucky allows four while Tennessee only allows one "commemorative bottle").

For: Customers constantly complain about the limit and distillers constantly apologize for not being able to take people's money. Most distilleries have come up with workarounds already, so why hurt businesses with legislation? #Socialism. Selling more alcohol increases taxes collected by the state and increases demand for locally farmed grain. Everybody wins.

Against: The likely argument against will come from the legally mandated distributors who will say that they will lose money through this change. Nobody wins.

Two ounce tasters

Proposal: Allow customers to try two ounces of each spirit at distillery instead of only two ounces of all spirits in a day.

For: More tasters equal more sales and a better customer experience.

Against: Alcohol gets people drunk. #TheMoreYouKnow

Off-site tasting room

Proposal: Allow standalone tasting rooms that are NOT distilleries but sell and provide samples of the distillery's spirits.

Context: Most distilleries are pushed into industrial zones or improvement districts, far away from foot traffic and tourist areas. They can't come to special outdoor events to market their product or participate with the community.

For: Put a tasting room in a high-traffic tourist area, such as Downtown Reno or Midtown or farmers markets. Think of the possibilities of a single area with tasting rooms from all Nevada's distilleries.

Against: Put a room full of alcohol in a high-traffic tourist area, such as Downtown Reno or Midtown. Think of the possibilities of a single area with tasting rooms from all Nevada's distilleries…

Increase out-of-state export limit

Proposal: Increase out-of-Nevada export of liquor from 20,000 to 40,000 cases.

Context: This was originally proposed, along with the in-state case limit of 10,000 cases, to create "craft" status and to prevent large-scale distilleries from overpowering small businesses. This is similar to what creates microbrewery or craft beer status in the U.S., except those are not actual laws.

For: More out-of-state sales increases tax revenue, improves Nevada's reputation and enlarges a distillery's brand, driving tourism into the state.

Against: Craft distilleries should stay small and not grow or be allowed to succeed.

Donate to charity

Proposal: Pretty straightforward, distilleries get a permit to transport spirits to non-profit and charity events without requiring a distributor to transport it for them.

Context: Breweries can already do this with a simple permit.

For: Saves time and money by making it easier for distilleries to participate and donate spirits at events.

Against: Ummmmm… you hate freedom, children and hospitals?

Michael Higdon is the editor of DrinkableReno.com, a beer and spirits blog in Reno that covers drinking news and trends in northern Nevada.

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