Las Vegas and Henderson getting into spirit of distilling liquor

Later this year, some of the spirits that visitors imbibe in Las Vegas could be made in Las Vegas.

Two planned distilleries are on the verge of overcoming bureaucratic hurdles and legal blockades and opening in the valley.

On Tuesday, Las Vegas officials gave preliminary approval to a new business license category for liquor manufacturing, a designation that doesn't exist in current city code.

Owners of a distillery in Henderson, meanwhile, expect the last of its equipment to arrive this week. Pending some final permit approvals, distilling could start in a month.

The Las Vegas project is Nevada H&C Distilling Co., a new venture of Jonathan Hensleigh and Aaron Chepenik, who co-own The Griffin in downtown Las Vegas as well as bars in Los Angeles.

"The responsible alcohol business has been very good to us," Hensleigh said. "We thought we would expand our business by going into the manufacturing of spirits. Just think of us as Jim Beam or Jack Daniel's, on a much smaller scale."

The change in city code needs approval by the full Las Vegas City Council, which is scheduled to consider it Jan. 19.

The applicants also are waiting on state and federal permits.

They have found a location, 3,700 square feet in an industrial building on Mesquite Avenue downtown, near the Ready Mix concrete plant in the shadow of the Interstate 15 freeway. They plan to start with five fermenters and one still for distillation, and expect their equipment to arrive next month.

Starting a distillery has forced the would-be liquor makers to navigate a regulatory structure in place since Prohibition, the period between 1920 and 1933 when the manufacture, sale or transportation of alcoholic liquors was prohibited by the 18th Amendment of the U.S. Constitution.

It was designed to keep large liquor makers from monopolizing the market by also owning all the bars, Hensleigh said. But what it has done is keep distilleries out of Nevada even as small, niche businesses thrive in many other states.

When they open the distillery, Hensleigh and Chepenik will be able to make and bottle spirits -- they plan to start with vodka, eventually moving on to whiskeys -- but they won't be able to sell them directly to bars and clubs or to the public at their plant.

Under Nevada's system, liquor makers must sell to wholesalers, who then sell to the retail customers.

That's fine for them, Chepenik said. They have retained Dave Pickerell, former master distiller for Maker's Mark whiskey, to work for them, and they hope to grow into a national liquor company.

They are unsure how many people their distillery will employ.

"I think this is great," said Las Vegas Councilman Stavros Anthony, an avid fan of single-malt Scotch. "We're creating new industries and new jobs and diversifying the economy."

George and Catalin Racz, the people behind the Las Vegas Distillery in the Henderson Commerce Center on Eastgate Road, are hoping to change the distilling scene altogether with a new state law.

They hope to start distilling vodka and gin in about a month, with other products that require aging coming later. Like Hensleigh and Chepenik, they will be selling only to wholesalers at first, but a bill was filed for the next legislative session that would let them do more.

Racz wants to have liquor tastings at his distillery as well as classes on making spirits. A bill draft request has been filed in the Assembly's Commerce and Labor Committee that would set up rules for licensing and operating distilleries.

"Hopefully, we will be lucky," said the Romania-born Racz. "Now we can distill, but we cannot give tastings like you can in other states."

For now, the businesses will be able to operate with an importers license and a "letter of compliance" from the state saying all applicable laws are being followed, Chepenik said.

Henderson most likely will follow Las Vegas' lead in creating a new local licensing category for distilleries, city spokesman Bud Cranor said.

Racz's license is pending for now, but probably will end up being issued conditioned on his following all state and federal rules until the city amends its code.

"It's a different kind of business than has ever operated here," Cranor said.

Contact reporter Alan Choate at achoate@reviewjournal.com or 702-229-6435.