It’s going to get easier to open a distillery in SLO County. Here’s how
In most cases, San Luis Obispo County businesses could previously only open a distillery on land that was also used for a winery. Next year, however, distilleries will be allowed to operate more independently — potentially making it easier for more to open in the area in the future.
The San Luis Obispo County Board of Supervisors voted 4-0 on Tuesday to adopt three big changes to its land use ordinance, giving more freedom to how distilleries and wineries use their property.
“It’s really pretty amazing,” Paso Robles Wine Country Alliance government affairs coordinator Patricia Wilmore told the Tribune on Wednesday. “It’s something that will really bring new business to the county.”
Supervisor Debbie Arnold left the meeting for a personal family commitment and missed the vote, she said.
SLO County distilleries can operate separately from wineries
Before the ordinance change, the county considered distilleries to be a form of food and beverage manufacturing.
Distilleries are used for the “crushing, mashing, barrel aging, blending and bottling of fermentable raw materials into distilled spirits,” a county staff report said.
In SLO County, food and beverage manufacturing on agricultural lands and rural lands is “limited to processing raw materials grown on site,” county planner Kip Morais wrote in an email to The Tribune.
This meant that distilleries were often limited to properties also used for wineries.
However, distilleries could already operate independently on industrial land, according to Morais.
On Tuesday, the board voted to allow distilleries as an agricultural processing use. This means the county will treat distilleries similar to wineries, so distilleries can process raw materials grown off site as well as on site.
San Luis Obispo is already home to a handful of distilleries, including Krobār Craft Distillery in Paso Robles which produces rye whiskey, bourbon, gin and vodka.
According to Wilmore, the board’s land use changes make it easier to start a distillery, and could attract more distillery businesses to the region.
Allowing a distillery to operate independently will make it easier to open one, Wilmore said, which creates opportunities for more specialized businesses in the county.
“In some cases, the distillery business can be as lucrative as the wine business,” Wilmore said. “They begin to really specialize in that.”
She also predicts a change in agriculture production, with farmers growing crops that are used to produce spirits processed in distilleries in addition to wine grapes.
“We have members that have been very energetic about getting this done,” Wilmore said at the meeting. “Distilleries being now called an agricultural processing use will open up a lot of opportunity in agriculture, which is a prime economic engine in our county.”
Under the updated ordinance, owners will still need to obtain a minor use permit to start a distillery like wineries do, Morais said during a presentation to the Board of Supervisors on Tuesday.
Distilleries will also be held to the same standards as wineries for design, signage, parking and setbacks, he said.
Additionally, properties that include a winery and a distillery will be allowed to open two tasting rooms: one for the winery and one for the distillery.
Board of Supervisors update agricultural land use policies
Meanwhile, the Board of Supervisors also voted to allow agricultural operations, including wine grape vineyards, to open guest ranches on their properties.
Before this change, the county only allowed guest ranches on land used for cattle ranching, according to Morais.
Finally, the board changed the rules for retail businesses selling wine, olive oil and spirits.
Now, retailers can build wineries, distilleries and olive oil processing facilities on property zoned for commercial land use if the products they make are primarily sold on-site, according to Morais.
“This is intended to allow for small craft production of these products with a predominantly on site sales component,” he said.
This story was originally published November 30, 2023 at 5:00 AM.
CORRECTION: A previous version of this article incorrectly stated where distilleries could previously operate. Distilleries could operate on the same land as a winery, but could also occasionally operate independently.
