The Spirit of the Law

Beer is often associated with festive summer barbecues and ball games. Wine, with meals, holidays, and celebrations. But spirits, even decades after Prohibition ended, may not have such positive associations, according to some local distillers who say a negative public sentiment toward “hard liquor” still exists.

Although the craft cocktail scene is strong, historically it’s been an uphill battle for local craft distillers. Decades-old legislation had made operations nearly impossible in Sacramento, and many in the business say they just wanted to be on the same playing field as craft brewers and winemakers.

Still, a handful of craft distilleries have sprung up throughout the Greater Sacramento region in recent years, spurred not only by increased consumer demand, but also by updated legislation that eased some of the existing operational restrictions. 

PROHIBITION-ERA LAWS

First, a little background: California’s Alcoholic Beverage Control Act governs the production, distribution, and sale of alcoholic beverages within the state. The Craft Distillers Act of 2015 created a new license for distillers that produce less than 100,000 gallons of spirits a year (it has since been upped to 150,000). In addition, it allows craft distillers to offer tastings in the form of mixed cocktails, raises the tasting amount to 1.5 ounces, and permits direct-to-consumer sales of up to 2.25 liters of spirits per customer, per day.

Many laws governing the alcoholic beverage industry in the United States were developed after the Prohibition era, yet because of the public’s adverse opinions toward liquor, many anti-vice provisions remained. Though alcohol was technically legal, there was a desire to restrict its flow and reduce consumption. Many states, including California, implemented a three-tier system of alcohol distributors: manufacturer, distributor, and retailer. A business must be licensed only within one tier, and, for the most part, none can have an interest in another.

Some of those early provisions have been slowly chipped away, thanks, in part, to the efforts of the California Artisanal Distillers Guild. Led by Cris Steller, owner of Dry Diggings Distillery in El Dorado Hills, the group was formed in 2012 with the goal of leveling the playing field for small-time distillers. Unlike brewers and winemakers, distillers were not permitted to sell their products on site, which simply wasn’t financially feasible. 

“The first big thing we did was to get tasting rooms open so owners would be allowed to pour samples,” Steller says.

In the early days, it was nearly impossible to enact change. The three-tier system was the status quo, backed by lobbies far more powerful than the average small business owner. But the guild began getting larger and stronger, and lawmakers started listening.

“Before 2015, it was really difficult to get a distillery going in California. You couldn’t make something and sell it. You had to have a distributor,” Steller says. “But distributors don’t always want to carry small brands like mine unless they have a following. But how do you get a following without a tasting room?”

Steller credits a growing interest in craft spirits and craft cocktails as the impetus behind the loosening of laws. The first craft distillery in California, St. George Spirits, opened in Alameda in 1982, ushering in what Steller calls the “second wave” of craft distilling. But it wasn’t until the resurgence of craft cocktails in the late 1990s and early 2000s that the industry really took off. 

“When craft cocktails started making a comeback, the public started to support it,” he says. 

The most recent legislation the guild is pushing for, SB 620, which was still pending at the state legislature at press time, would further loosen the laws, extending the now-expired emergency direct-to-consumer shipping allowances within the state as well as to states with reciprocity agreements. It would also raise the sale limit from 2.25 liters to 4.5 liters per customer, per day. Steller said this bill would further allow smaller distilleries to compete with larger manufacturers. 

BREAKING DOWN BARRIERS

The stringent requirements have made it extremely difficult for many aspiring distillers to set up shop in the Sacramento area. One exception is Midtown Spirits, the first distillery to open within the city limits since Prohibition. It was founded by Dave Abrahamsen and Jason Poole, who also run Sacramento’s Preservation and Co., which makes cocktail mixes and garnishes. 

Midtown Spirits isn’t just a distiller; it’s also a full-service restaurant. It produces several house-made spirits, including gin, vodka (with versions made with corn or locally grown rice), and a cold-brew coffee liqueur. The business also offers infused vodkas, with flavors including cucumber, strawberry, berry, and dill pickle. 

Poole says one of the biggest challenges for distillers is finding the right space. Zoning ordinances, building codes, and fire codes all dictate the required size, location, and safety features of a manufacturing facility. Luckily, Poole and Abrahamsen didn’t need a brand-new permit. Rather, they were able to amend the one they already had for their existing business.

Despite opening Midtown Spirits at the height of the pandemic, they weathered the storm. In fact, they actually benefitted from it: They were able to build a patio to offer outdoor dining, a permit for which is often difficult for distilleries to obtain. 

Poole and Abrahamsen say they just want to be on the same playing field as other manufacturers of alcohol and hope to pave the way for those with similar ambitions.

“We’re proud to be the first ones here, but we certainly won’t be the last. We’re excited to build an industry around it,” Poole says. “People are exploring, learning, and enjoying spirits the same way they do with wine or beer.”

PLANNING A PERFECT PAIRING

In Roseville, Patricio Wise is producing vodka from his distillery adjacent to his restaurant, Nixtaco. Although he’s had a license for wine and beer since opening the restaurant in 2016, securing a liquor license has been more challenging. Wise says the number of licenses issued is based on population. Because eastern Placer County is relatively rural, it skews the numbers for more densely populated areas such as Roseville. In other words, there just weren’t enough licenses to go around. An annual lottery determines which establishments get them, but his name has never been drawn. 

“We were never able to get a license, but we wanted to have a full bar. We’re a Mexican restaurant. We wanted to have real margaritas,” Wise says. 

Distilling his own spirits had always been a goal for Wise, and having a distillery on the premises meant he also could serve mixed drinks to customers. So when the opportunity came up to expand next door, he took it. Part of the challenge was building out the space to meet current building and fire codes. Distilling is considered a hazardous activity, as the vapors it produces and the alcohol itself are highly flammable. As such, distilleries must be equipped with increased fire prevention and protection implements such as sprinklers, fire doors, ventilation systems, and explosion-proof electrical fittings. 

Wise began the process right before the pandemic, but worker shortages and supply chain issues caused the project to move at a “piecemeal pace.” It got completed in August 2021, and Nixtaco reopened the next day as a Mexican kitchen and distillery. 

Nixtaco, which earned a Michelin Bib Gourmand Award in 2021, released its first vodka earlier this year, under the name Emilia, in honor of Mexican revolutionary Emiliano Zapata. The product has already won several awards, including a silver at the 2022 SIP Awards and a gold at the Denver International Spirits Competition. Next up? Gin and perhaps a blended whiskey.

“We are in the midst of a revolution in the Mexican gastronomic scene, as well as a revolution in craft distilling,” Wise says. “We will continue to work on our portfolio and develop new products.”

Midtown Spirits
Midtown-spirits.com

Nixtaco Mexican Kitchen & Distillery
Nixta.co

Dry Diggings Distillery (also operates Amador Distillery)
Drydiggings.com

California Artisanal Distillers Guild 
Cadistillers.org