A Sobering Experience

George Racz worked tirelessly for 2½ years to launch Nevada’s first legal distillery, at a time when the state’s struggling economy could use some diversity. The Romanian immigrant seemed to have everything going his way when he began operating Las Vegas Distillery in March. All he needed next was passage during this year’s legislative session of Assembly Bill 542, which would establish the guidelines and provide licensing for craft distilleries in Nevada. But after the Assembly unanimously passed the bill on June 4, it died on the Senate floor.

The bill would have allowed Racz to sell his products (a maximum of two bottles per customer) onsite at the Henderson-based distillery, as well as host tastings. It also limited Nevada distilleries to manufacture no more than 10,000 cases of spirits per year. But now, with no distillery license category in place, Racz is left with limited options for how he can begin to recoup his $500,000 investment.

Racz, who helped draft AB 542, envisioned his venture as an artisan boutique distillery that would be both a part of the local landscape as well as a tourist attraction. But now he has no legal avenue to sell his product onsite to visitors. That was an important part of his business plan—spreading the word, one guest at a time. He can sell through distributors, but craft distilleries build their brands at home.

The failure of the bill also means there’s no regulation for where potential distilleries get their raw materials from. (Racz has already partnered with Winnemucca Farms to ensure he gets most of his materials from within Nevada.) The entire business now lingers in a strange legal twilight zone where it’s not forbidden by law, but it’s unclear what’s allowed.

Racz has already barreled a couple of different types of vodka and whiskey, and cooked his first bourbon. (Wirtz Beverage Group will distribute the spirits.) But he’s mystified that his vision for Las Vegas Distillery must wait in legal limbo for another two years.

“Everybody can do everything, but nobody can do anything because you don’t know [what the rules are],” he says. “And who will tell you? Who is the authority to tell you that you can manufacture a barrel of whiskey? It’s not prohibited, but it’s not allowed, so what can I do? This is exactly what I wanted to avoid.”

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