New law expected to help Ohio’s microdistilleries

A new law that takes effect March 22 is expected to help spirits producers in Ohio expand operations.

House Bill 243, introduced by Ohio Reps. Casey Kozlowski and Ron Young, allows microdistillers to sell spirits in full-size bottles at their facilities for carry out without having a special permit.

Under current law, those special permits can only be obtained in counties with at least 800,000 residents and may be issued to just one distiller, preventing the majority of manufacturers from making on-site sales and creating a power grab in counties that meet the population requirement.

“Selling on site after a tour of the facility is a huge opportunity for a startup distillery,” says Greg Lehman, co-owner and distiller at Watershed Distillery, which launched in September 2010. “This will help the young distilleries with cash flow to keep them rolling.”

As Watershed could not sell product at its Grandview facility (Middle West Spirits has Franklin County’s sole permit), Lehman was particularly interested in the development of HB 243.

“A fellow distiller named Dan Maltz from Cleveland connected me to the legislators that introduced the bill in the Ohio House,” he says.

Once he and Watershed Co-Owner Dave Rigo learned of the legislation, they spoke with their representative, Michael Stinziano, about why they supported it. They also talked to Kozlowski about some additional needs they hoped the legislation would address.

“Some of these needs were added while the bill was in the Senate, including easing the ability for us to offer tastings at our distillery,” he says.

Agribusiness has been able to generate tourism and tax dollars, and the Ohio Department of Commerce claims the microdistilling trend that has spread to the Buckeye State could be a big help to the industry. Besides creating jobs, microdistilleries will create new demand for Ohio agricultural products, as many prefer to locally source the ingredients that go into their spirits.

Lehman expresses a similar sentiment, saying, “With more distilleries using Ohio grains, it will lead to an increase in consumption of our state’s agricultural resources. This is a win for Ohio farmers and consumers.”

However, he says there’s room for legislative improvement where spirit makers and taxes are concerned.

“I think people need to know that House Bill 243 is a step in the right direction, but in no way solves the heavy tax burden microdistilleries face,” he says. “We understand that taxes on alcohol are important for state funding. Our goal is the get the level of spirit tax for microdistilleries on a similar level to other products, including [those produced by] microbreweries and small wineries. This allows a small operation like ours to hire people more quickly and reinvest in necessary equipment to grow.”

Photo of Dave Rigo provided by Chris Walker Photography. Chris Walker works as a on-location commercial photographer working with cooperate, advertising, and editorial clients. If you would like to connect with Chris Walker Photography, email CW@CWalkerPhotography.com or visit CWalkerPhotography.com.