The process of starting a
distillery is rightfully intense – the average start-up craft distillery takes
1½ to 2 years of business planning followed by 12 to 18 months of
licensing. Beware - the process is
painstaking and detail oriented.
After a year or two of developing
a business plan to outline production, products, marketing plans, financial projections,
capital, location and equipment, you can then start the organizational and
permitting process. Make note that when
selecting a location, zoning is critical – thankfully our municipal leaders
have been excellent to work with!
The first step in the permitting
process is obtaining a Federal TTB Permit. All distilleries, breweries and wineries must
be federally approved to exist. The TTB
is part of the Department of Treasury, and their formal name is the Alcohol and
Tobacco Tax and Trade Bureau. After a
detailed inspection of your organizational documents, background checks on
shareholders, an understanding of your equipment, security, insurance/bonding,
etc., etc., the TTB will issue a Distilled Spirits Plant number, or DSP. Once a DSP number is issued, you legally
(under Federal law) can produce spirits; although you cannot yet sell them. The process of obtaining a DSP can take 6 to
8 months.
With a DSP number in hand, you
can submit a formula to the TTB’s Advertising, Labeling & Formulation
Division. In this process you must
outline your formula, in detail, with all ingredients and any additives used in
the process as well as specific production and aging methods. This process typically takes 3 months to
receive approval, and it must be completed for each and every product.
Once a formula is approved, you
must submit your label to the TTB’s COLA Division (Certificate of Label
Approval) for approval as well. In this
process the TTB verifies that the product being produced matches the label
being used and that the correct disclaimers are used. The process of label approval usually takes 3
months, and it also must be completed for each and every product.
Now that all 3 federal approvals
are secured, you must obtain a municipal liquor license. This license will authorize you to sell
spirits, provide tasting and operate within your facility (depending on municipal
laws). While accomplishing this task, you
must also obtain approval from the Environmental Protection Agency for the
disposal method of spent mash. From our
experience, the EPA approval was the most complicated.
In the last licensing step, you
must submit all of your previous approval documents to the State of Illinois -
Liquor Control Commission. The
Commission grants the final approval for all DSP’s in the State of
Illinois. This final step (while a
marathon to get to) can take 1 to 2 months to receive approval. Once this approval is granted you have been
authorized by all authorities to produce and sell spirits!
Please note - this is purely an overview
of the licensing process, not all steps have been included.