Ideas for Shared Distillery Space

[Luv2Learn]

We have been doing some production for a local brewery of ours and it got me thinking:  Does anyone have any experience with sharing their distillery or bringing in a brewery as an investor?  I am looking to bring on an investor but also want someone in the industry for several reasons. Anyone have experience with this?  I am thinking of a "shared space", "leased time", or "investor opportunity".  

Shared space would be if someone wants to have their own brand but be able to use the tasting room as well
Leased time would be just time to use the equipment (with our distiller)
Investor opportunity would be making them a partner in the whole operation

When I was looking to open up 4 years ago, this forum was a ton of help so I figured you all would be my first stop!  

[Foreshot]

From a federal standpoint you probably can do this but it might take some legal gymnastics. You should investigate it on a state level first though. I know in PA this would not work. 

[SCLabGuy]

My advice...

1) Lawyer up

2) Thoroughly research and understand Alternating Premises and Alternating Proprietorship as it relates to Federal Basic Permits

3) As Foreshot said, make sure it's legal in your state

4) If you still want to do it after steps 1-3, don't.  Partnerships are a nightmare.

[Luv2Learn]

If they were investors in the distillery, and were owners, I do not think that we need any of the above but I still agree in "Partnerships are a nightmare".  We are just not at the production level to keep us afloat right now and I do not want to give up.  I do see that lawyers would be needed if we just "shared the space" and they were not owners in the actual distillery.

If anyone has done anything such as this - would love your feedback.  Thanks everyone!

[Tom Lenerz]

You can't have a DSP and brewery licensed in the same space at the same time federally, that's what the alternating premise is, even if it is the same owners. You can only do one activity or the other, not both, so if beer is fermenting in one tank you can't be fermenting wash for single malt next to it, unless its separated. 

[Luv2Learn]

On 6/17/2022 at 4:59 AM, Tom Lenerz said:

You can't have a DSP and brewery licensed in the same space at the same time federally, that's what the alternating premise is, even if it is the same owners. You can only do one activity or the other, not both, so if beer is fermenting in one tank you can't be fermenting wash for single malt next to it, unless its separated. 

They transport their beer to us and we distill it.  They ferment their own currently.

[WhiskeyNwoods]

On 6/17/2022 at 7:59 AM, Tom Lenerz said:

You can't have a DSP and brewery licensed in the same space at the same time federally, that's what the alternating premise is, even if it is the same owners. You can only do one activity or the other, not both, so if beer is fermenting in one tank you can't be fermenting wash for single malt next to it, unless its separated. 

Last I read in the guidance that you could have a brewery and a distillery in the same premises so long as they have independent equipment and are separated by a partition. It may have changed though.  

[Cosmic.Distiller]

There's two options for a brewery and a DSP: as WhiskeyNwoods said you could either have dedicated equipment for each, separated by a partition (I know one place that just uses a 1 inch piece of wood along the floor), or you have it where they share equipment, but can only have either brewing activity or distilling going on, not both.