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'Shine On: Developers work to establish local moonshine distilleries

March 22nd, 2014 9:56 pm by By Max Hrenda, Brad Hicks, and Nathan Baker, Press Staff Writers

'Shine On: Developers work to establish local moonshine distilleries

(Photos below of Stephen Callahan & NE TN Distillery by Lee Talbert/Johnson City Press)

Though any act of “moonshining” used to be considered illegal in Tennessee, state laws have relaxed in recent years, and with the proper paperwork — and state and federal tax payments — distilleries can now operate legally throughout the state.

In 2010, one year after state law was revised to allow the legal distilling of moonshine, the first federally licensed moonshine distillery, Ole Smoky Distillery, opened in Gatlinburg. Since then, others throughout the state have staked their claim to producing authentic — and legal — moonshine.

One of those efforts to bring a legal distillery to the area is happening in the town of Unicoi.

North Carolinians Jerry Prosser and Earl Ponder previously approached town officials to inquire about the possibility of opening a legal “traditional” moonshine distillery within the town’s limits. This request has been a topic of discussion at the town’s last three meetings of its planning commission.

Prosser and Ponder are currently looking to establish the facility on around one acre of property near Scott Lane, but the two have said they would be open to other property locations in the town. They are looking to construct a 20-by-40-foot building at which they want to start out by manufacturing around 50 gallons of moonshine per week, with hopes to eventually increase this production to around 250 gallons per week.

At a town of Unicoi planners meeting held earlier this month, Prosser said those involved would develop the distillery around tourism, and aside from moonshine, the distillery would also sell memorabilia.

“We want to use the old-timey, original, historic-type still to do the distillery and the old method of mash, which we think brings the heritage side back into it,” Prosser said previously. “We’d like to have a building that looks more historic, not like it was built yesterday, to bring some of the history back into it. ... We want to sell memorabilia, T-shirts, bring tourism and make it more of a family deal.”

Unicoi Mayor Johnny Lynch said the town has already, for the most part, set the stage for Unicoi to welcome a distillery. Earlier this month, Misti Crain, a special agent with the Tennessee Alcoholic Beverage Commission, told town officials that because the town has already passed ordinances permitting liquor by the drink and the establishment of package stores, a distillery could set up within the town.

Lynch said the town’s planning commission may have to approve a site plan, but the distillery moving forward really boils down to Prosser and Ponder confirming a location.

“We’ve told him that we welcome his business, or any other business for that matter, to our town, and we’ll be glad to work with him on whatever he does decide on,” Lynch said.

Like town officials, Lynch said Unicoi citizens seem open to the idea of the distillery.

“You may run into a naysayer occasionally, but most of the folks that I’ve talked to seem to be not very concerned about it,” he said. “They’d be OK with it. I’m just speculating right now, but I really don’t see a problem. I think it’s basically up to these fellows to kind of zero in on where, for sure, they want to put their distillery.”

Lynch also said he understands Prosser and Ponder were looking to establish the business in Tennessee rather than North Carolina due to less-stringent distillery laws. While local examples are limited, Lynch said the town will keep an eye on an already-established distillery in Piney Flats and the one planned for Jonesborough for possible direction.

“We don’t have any neighboring areas around here that we can use for a model,” Lynch said. “Most of the ones that have come up so far have been down in Gatlinburg, and they’re right there in the middle of a very high-traffic area with thousands of people going by there, and it’s kind of hard to compare that with anything we would have here. We don’t have any kind of an area like that.”

While Prosser and Ponder remain in the planning process, other potential distillers have already selected a location and have received governmental approval to move forward with establishing a base. In Jonesborough, Stephen Callahan has begun the process of opening a moonshine distillery at the Salt House, 127 Foxx St., in the town’s historic district.

Callahan, a Jonesborough native, said he was eager for the chance to share part of his hometown with the state, and — he hopes — the country.

“We really intend to put the spirit of Jonesborough inside of a liquor bottle,” Callahan said. “Hopefully, (we can) take that and put it all over the nation.”

Part of the reason Callahan feels his spirits could have national appeal is by celebrating something touted in the Jonesborough community — history.

“Pretty much everybody that is originally from this area can trace their ancestry back, and I would bet someone along the line had something to do with either making or transporting alcohol,” Callahan said. “The most special part about the whole business is that we’re able to carry on history and make a high-quality product.”

In celebrating that history, Callahan said he will manufacture his moonshine the same way his Prohibition-era ancestors did.

“Back in the old days, moonshiners didn’t have sacks full of sugar lying around,” Callahan said. “They had fields full of corn and orchards full of apples, and that’s what they used to make their moonshine. That’s what we want to do — to give our customers the most authentic Tennessee moonshine experience possible.”

While Callahan wants to provide his customers with an “authentic” experience, he added that some of them may not be aware of what that means. Unlike Tennessee whiskey — the definition of which is under review in the state Legislature — Callahan said there is no standard, state-sponsored or otherwise, by which to grade Tennessee moonshine.

“As far as Tennessee moonshine goes, there’s no official requirements by the federal government, so they can’t really say you have to have a certain amount of corn or sugar or something like that,” Callahan said. “That’s something that should be looked into.

“If you’re going to say on your liquor bottles that it’s a Tennessee moonshine, then it has to follow a certain amount of requirements to be classified as a Tennessee moonshine.”

While regulation on what qualifies a moonshine as a “Tennessee moonshine” is still pending, Callahan said he learned that the amount of local state, and federal regulations for establishing a distillery can be staggering.

“It’s not an easy business to get into, especially when you step back and look at all the paperwork,” Callahan said. “You have to get all your forms and have to make sure you meet all the tax requirements from the federal government.”

Despite the amount of governmental regulation, Callahan said pending legislation may one day make it easier for smaller distilleries to operate.

“There’s actually been a few bills presented recently as far as reducing the amount of tax for distilleries that produce under 100,000 gallons a year,” he said. “The government is making a lot of money off of it. We’ll see whether or not they want to make it easier for craft distilleries to get into the business.”

Regardless of what the state or federal government change with regard to craft distilleries, the local government has embraced the prospect of a functional distillery in downtown Jonesborough. On March 10, the town’s board of mayor and aldermen approved a distilling company overlay zone, which established the boundaries in which a distillery could operate inside Jonesborough. Mayor Kelly Wolfe said he and the board saw the potential for positive economic impact in establishing a distillery.

“Overall, this type of business seems to be picking up steam throughout the state,” Wolfe said. “There’s no reason why Jonesborough shouldn’t be involved in that trend. This type of business adds a very nice texture to our overall effort to attract tourists.”

While Jonesborough and Unicoi are both in the early stages of establishing their distilleries, Piney Flats laid claim to a distillery almost two years ago.

Tom “Tiny” Roberson, Byron Reece and Gary Melvin got their Piney Flats facility, East Tennessee Distillery, up and running at the head-end of the state’s whiskey boom.

They established the business and invested in the equipment in 2011, and after 14 months of navigating Tennessee’s alcohol regulations, found a distributor and started making their brand, Tennessee Mellomoon.

The business has grown significantly in the past three years to multi-state distribution and a featured spot on a History Channel reality show, but Melvin said it came with “a lot of hard work and nail-biting.”

The vast differences between alcohol laws across state lines require careful consideration and a well-crafted expansion plan, he said, and an upstart owner with little experience could find the task daunting.

“Would I do it again?” Melvin asked. “Yes, but there are things I would have liked to have done differently.”

The expense of investing in the business and then waiting more than a year to realize any revenue was hard for the three partners, who came from other industries and professions to build the brand.

“The water’s warm boys, come on in. Good luck,” Melvin said to other would-be moonshiners.

Additional Photos

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