May 21, 2013 – Tennessee Governor Bill Haslam has signed a bill approved by state lawmakers last month that clears the way for the owners of the Chattanooga Whiskey Company to build their own distillery in a historic factory building.

In a separate move, Gov. Haslam signed a bill that establishes the state’s first standards for “Tennessee Whiskey”. That bill will force distillers that want to call their whiskey “Tennessee Whiskey” or “Tennessee Sour Mash Whiskey” to meet the federal standards for Bourbon and use the “Lincoln County” charcoal-filtering process. Distillers will have to comply with the new law when it takes effect July 1, but will have 36 months to sell off existing stocks of bottled whiskey.  The bill is seen as a blow for the state’s moonshine producers, who will not be allowed to refer to their unaged whiskies as “Tennessee Whiskey”.

Chattanooga Whiskey founders Joe Ledbetter and Tim Piersant have been fighting for several years to change a 2009 state law that expanded the number of counties where whiskey distilleries can be located. That law allowed new distilleries in counties where retail liquor stores and “liquor by the drink” sales are legal, but Hamilton County remains partially dry and was not included in the 2009 law. Legislators agreed to change the law to allow distilleries in “wet” areas of a county with approval of local officials. Hamilton County officials supported the change, and are expected to grant quick approval for the Chattanooga Whiskey project once the new law takes effect July 1.  Ledbetter and Piersant currently sell whiskey produced at the MGP-I Distillery in Lawrenceburg, Indiana, but plan to make a transition to locally-produced whiskey once their stocks mature. They have scheduled a “victory party” at the distillery site to celebrate the new law on May 31.

The bill received opposition in the Legislature because a separate provision removed the ability of local governments to mandate specific distances between two distilleries and impose a cap on the number of distilleries allowed in a city. According to The Tennesseean, that change was made after the city of Gatlinburg rejected plans for a moonshine distillery that would have been built on property adjoining the Old Smoky Moonshine Distillery. The principal owner of the proposed Sugarlands Distillery is a partner with Gov. Haslam in a number of real estate investments, and another partner in the distillery project resigned as Gatlinburg’s legislative lobbyist after city officials went on record as opposing the bill.

Links: Chattanooga Whiskey