Entrepreneurs exploring the idea of opening a microdistillery in Crow Wing County prompted officials to examine permitting and waste treatment requirements.
Administrative Services Director Deborah Erickson told the board at its committee of the whole meeting Tuesday she received a request for information from someone interested in distilling whiskey and offering a cocktail tasting room. Operating a business like this in Minnesota requires two licenses: a microdistillery license, and a cocktail room license. Crow Wing County administers liquor licenses for any businesses located outside of a city.
Erickson told the board current county ordinance and permit fee structure do not allow for a microdistillery, and changing it would require several steps including public hearings. In addition to lining up the paperwork, Erickson said there are waste disposal issues to be addressed.
"A (distillery) byproduct has to be disposed of in a certain way," Erickson said.
One of the waste products generated by distilleries is spent wash, or the unwanted residual liquid generated during alcohol production. A published study on the byproduct noted it can present environmental hazards if not properly treated.
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Most microdistilleries in the state thus far are located within cities with municipal waste systems, Erickson said.
Since the inquiry, Erickson said those interested in entering the microdistillery business informed her they planned to locate within a city. But the trending craft beer, wine and spirits industries mean it's likely a question the county will grapple with at some point.
Since 2013, five craft breweries have opened in Crow Wing County, and owners of a sixth plan to open by next month-14 Lakes Craft Brewing Company in Crosslake. Earlier this year, the county's first winery, the Dennis Drummond Wine Company, opened, running into some of its own permitting problems concerning the production of wine on-site.
No microdistilleries are in operation in the Brainerd lakes area, with the closest being Panther Distillery in Osakis. Rick Schneider, a state representative for the American Distilling Institute, told the St. Paul Pioneer Press in January there were 22 craft distilleries in Minnesota, with four or five expected to open throughout 2017.
Erickson asked county commissioners if establishing the permitting infrastructure was something they were interested in pursuing.
"Are there multiple cities in the county that have addressed it?" asked Commissioner Paul Thiede.
"I don't know of any that have done any of them yet, have addressed it at all," Erickson replied.
"I mean, this is going to be the new sliced bread, I'm sure, of economic development," said Thiede. "We're going to have distilleries popping up just like we had breweries popping up all over."
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"Oh, no doubt about it," Commissioner Paul Koering said.
"We better get right on this," Thiede continued.
Koering paused for a moment and looked at Thiede. "Are you being facetious?" Koering asked.
"Yes, I'm being very facetious," Thiede responded, and Commissioner Rosemary Franzen laughed.
"I think it's a good idea," Koering said. "Why are we going to curtail business, if businesspeople are going to come in and start a business? What's wrong with that?"
"I'm not curtailing business at all," Thiede responded.
County Administrator Tim Houle suggested the board should consider the waste disposal element of the distillery business, before moving ahead with the permitting changes.
"We ought to dig a little bit deeper into what exactly are the byproducts that have led others to want it to occur within a municipality that has a sewage treatment plant," Houle said. "Is this something that an individual septic system can handle? And if the answer to that is no, I think we've answered our question."
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Erickson told the commissioners she would research the byproduct issue and return to the board with recommendations on how to proceed on microdistillery permitting.
