KOJO NNAMDIWelcome back. On December 5, 1933 the 21st Amendment was ratified ending the nationwide prohibition of alcohol. Now 86 years later to the day, local alcohol manufacturing businesses are thriving, breweries, distilleries, cideries, wineries. You'll find them all over the Washington region. But how long can this craft renaissance really last and what could a looming federal tax hike mean for the health of the industry? Joining me in studio to discuss this is Jaime Windon, CEO and founder of Lyon Distilling Company in St. Michael's, Maryland. She serves as president of the Maryland Distillers Guild. Jaime, thank you for joining us.

JAIME WINDONThank you for having me.

NNAMDICan you tell us a bit of the history around distilling alcohol in Maryland pre-prohibition? The state was considered something of a whiskey distilling powerhouse.

WINDONAbsolutely and that's a fact that many people just don't know because ...

NNAMDII didn't until today. (laugh)

WINDONWell, it all but disappeared. You know, prohibition brought about many bad things, I mean, especially for the state of Maryland. Our distilling industry was all but decimated during those years. And afterwards it just never rebounded. There was a point at which it looked like it would. Maryland was known for a fabulous unique style of rye whiskey.

WINDONAnd when distilleries started producing again, you know, people's tastes changed. And there's a number of factors that led to the decline, but the sad fact is that after the 1970s, distilling was all but dead in Maryland. And so it's only been in the last decade that distilling has been revived. And people are starting to uncover and remember that Maryland, and Baltimore in particular, were hubs of booze activity.

NNAMDIJoining us by phone is Julie Verratti, chief brand officer and founder of Denizens Brewing Company in Silver Spring, Maryland and a member of the board of directors for both the Brewers Association and the Brewers Association of Maryland. Julie, thank you for joining us.

JULIE VERRATTIThanks for having me, Kojo.

NNAMDIThis is both for you and Jaime, but I'll start with you, Julie. For people who are manufacturing alcohol as you do, do you consider Maryland a good place to do business?

VERRATTIYeah, I mean, I think mostly. As a manufacturer, and I can speak even more specifically to Montgomery County in Maryland, which tends to have a bit of a reputation that is anti-alcohol friendly, you know, as a manufacturer it's a pretty fantastic jurisdiction to operate a business.

NNAMDIHow about you, Jaime?

WINDONI think Maryland's been a fantastic place for us to manufacture. We've seen support both from our local community on the eastern shore from our state and local legislatures as we've passed bills over the last couple of years. You know, six years ago when we started there was not as much freedom, but everything we've asked for we've almost gotten from the state. And the tourism department of Maryland has been amazing with their support and excitement in championing what we do. So it's been wonderful for us.

NNAMDIPaint us a picture of Lyon Distilling Company.

WINDONSo I have a very tiny, what we refer to as a nano distillery on the eastern shore. We're located in the town of St. Michaels and we make rum. We make American rum from Louisiana sugarcane seven days a week, 363 days a year. And tomorrow's our six-year anniversary, which is very exciting. We opened on the heels of the repeal of prohibition six years ago. But we are really focused on celebrating what we do. We love making rum and we love manufacturing spirits.

WINDONWe see it as, you know, a liquid art form. I have a background in the arts and so to be able to make something that is so historically appropriate for our state and for our country, and to be able to do it on a small scale, is something we're very proud of.

NNAMDIJoining us in studio is Jared Fackrell, owner of Capitol Cider House in Washington, D.C. Jared, thank you for joining us.

JARED FACKRELLThank you for having me.

NNAMDIAs I mentioned, you own the Capitol Cider House in Petworth. Do you consider D.C. a good place for alcohol manufacturing?

FACKRELLOh, of course. I think only second to New Hampshire D.C. consumes more alcohol per capita across the U.S., which ...

NNAMDIThere's some thirsty people in this region.

FACKRELLThere are many reasons, for sure. Yeah, so I think D.C.'s a wonderful place to do business. There's a wonderful audience here. The craft scene, I think as Jaime was saying earlier, is still fairly new here. You know, you go back a decade and there weren't any breweries or distilleries, and certainly cideries. And now in 2019 there are three cideries in the city alone and about 20 or so folks making alcohol. And I think that's suggestive that it's a great place to do business.

NNAMDIJaime, what motivated you to open Lyon Distilling in St. Michaels?

WINDONOh, Kojo, I have this habit of saying yes to crazy ideas (laugh) and St. Michaels, in particular, is just a real wonderful town. Many listeners may have visited. It's about an hour-and-a-half from D.C. and it's this lovely space, but it's a really authentic town. It's a place where people still make things. There's a little brewery and a winery right next door to us. There are watermen and oystermen working the land. And we have a boat-building program in our town as well. So it was the right time and the right place. It was absolutely serendipity and so ...

NNAMDIBefore that you spent a lot of years in Nairobi Kenya.

WINDONOh, well, I have to say I didn't spend as many hours in Nairobi as I did on Lamu Island, which is where I called home for two years and, yeah, very rural. Very different, but I will say having lived in the District and grown up just outside in Maryland, coming back to St. Michaels was about the closest thing I could get to rural Kenya. So it's a good spot. It wasn't that big of a leap.

NNAMDIHow do you make Maryland Whiskey and what exactly makes it Maryland whiskey to begin with?

WINDONAbsolutely. So Maryland whiskey is one of those very unique categories of spirits that is defined by where it is made. We call that an appellation of origin, and so not many spirits have that. You can pretty much make most spirits anywhere you want. Many listeners are probably familiar with champagne being that most common drink that has to be made in a certain region. So Maryland rye whiskey, you can do Maryland-style whiskey, but you can only make Maryland rye in Maryland.

WINDONSo we distilled rye when we first opened. I will say that three years ago I made the decision to stop making whiskey in lieu of just pursuing 100 percent rum. But Maryland rye whiskey had a ton of renown and fame for being this very delicious balanced floral spirit in stark competition to our neighbors in Pennsylvania, who competed with Maryland head-to-head before prohibition for the best rye in the land.

WINDONAnd so now it's really exciting, because as Maryland Distilling grows we have nearly 30 distillers right now operating. And I would say at least half of them are distilling rye whiskey again. So it's experienced its own micro renaissance that isn't always defined by exactly the style in which it's made. It's up to each distiller, but it's made from rye grain and the whiskey must be distilled in Maryland in order to be Maryland rye.

NNAMDIJared, it's my understanding you decided to pursue cider making, because you were tired of wineries. Tell us about that.

FACKRELLMore or less that's true, Kojo. So I have little kids. At the time I had two and for anyone in the audience today, Lisa and I found kids drive you to drink at times. (laugh) So we were on a family trip up to New York and we were visiting wineries all week. We had reinforcements with the grandparents. And toward the end of the week we said too much wine.

FACKRELLAnd we stumbled upon a cider house near Ithaca called Finger Lakes Cider House. And all I knew was woodchuck from my undergrad drinking days. And my roommate cared for it, I did not, and so I was very biased. And this is a classic way someone gets into cider. Went in, had a flight, had a glass. Very surprised by how different it was. It was drinking like a white wine. It was very crisp. It was dry. It was not cloyingly sweet. And that was sort of a catalyst.

FACKRELLCame back and got a book off of Amazon on how to make cider, taught myself how to make it, cannibalized my boy's closet, to store home brew for a couple of years and opened the Cider House as a result.

NNAMDIHow would you describe Capitol Cider House to a newcomer?

FACKRELLSure. So we are a neighborhood gathering spot so at Capitol Cider House, local drinks, local food, local music. Everything that we source -- all the apples come within 200 miles of the capitol building. Most of our sourcing is actually within 100 miles. So our goal is to sort of expose people to apples in different ways, whether that's cider, whether that's (word?), which is like an apple port that we make, whether that's through a workshop. There's a number of ways to sort of revisit cider.

FACKRELLAnd I think -- we've been talking about craft renaissance. For the first 300 or so years of westerners living on this continent, cider was the predominant drink of choice. And I think a lot of people don't necessarily know that. And in this region in particular, you know, George Washington and Thomas Jefferson have very, very long pedigrees of making the drink and it's sort of making a comeback now, which is nice to see.

NNAMDIAll of you, part of your big mission statement is sourcing locally. Why is it so important to buy locally-produced products? First you, Julie Verratti.

VERRATTIWell, I think, you know, when you buy local products, whether, you know, we're buying it in terms of our supply chain all the way through the consumer drinking the final product, all of that money is being pushed back into the local economy. You know, there was a study done in 2018 in Maryland by the comptroller's office. And they found that for every dollar you spend buying beer that was made in Maryland in the state of Maryland you had almost a 60 percent larger economic impact to the state by keeping those dollars local. So I think just from an economic perspective, it's a huge thing.

VERRATTIThe other part of it is that, you know, the stuff that we all make, whether it's the beer that Denizens makes or the rum that Lyon is distilling or the cider that Capitol Cider's making, these are all food products, right. And so you want to be able to drink these drinks when they're made fresh. And if you're drinking a locally made product, you can't really get more fresh than that.

NNAMDIYou're thinking the same, Jaime?

WINDONAbsolutely. You see me nodding my head over here. (laugh) Julie's always spot on. It's all about relationships as well. So for us it's about fostering relationships that we want to support. So for Lyon, while our raw ingredient is not grown locally -- sugarcane is not conducive to growing in this environment -- we have a very strong relationship with the farmers and the mill that we work with in Louisiana. We also see our local community as a bit wider than just the eastern shore or just Maryland. I see the entire country as local for our products, whether it's the sugar we use, the glass that our bottles go into. Everything that we do comes from America, which is really nice as far as manufacturing and bringing it back.

WINDONAs I said before, I've lived abroad in any number of countries, so I do consider myself a global citizen, but, yes, the economic impact of buying local and having that unique sense of place that everything has its component and is exceptional is very important, I think.

NNAMDISame for you Jared?

FACKRELLOf course. Yeah, no, I'm nodding my head as well. So I think, you know, my wife and I, we've been part of the CSA in the area for years now.

NNAMDIClagett Farm, right.

FACKRELLClagett Farm, which is a wonderful farm, part of the Chesapeake Bay Foundation. And I think seeing where your food is grown and being able to sort of interact with it at that level and brining my kids there to be able to pick tomatoes or pick herbs and sort of seeing that connection is important. And I think if you look at freight costs and sort of an economics guy, too, you know, a bag of lettuce from California or a bag of lettuce grown here, you're saving a lot in terms of sustainable environmental practices too.

NNAMDIGot to take a short break. When we come back we'll continue this conversation on alcohol manufacturing in this region. I'm Kojo Nnamdi.

NNAMDIWelcome back to our conversation on alcohol manufacturing in this region. I'd like to go directly to the phones. Here's Ana in Washington, D.C. Ana, you're on the air. Go ahead, please.

ANAOh, hi. Hi, Kojo. Great to be on your show.

NNAMDIThank you.

ANAI wanted to say that we go out to the eastern shore a lot. We love St. Michaels and we love going to the Lyon Distilling Company. It has a great tasting room. The rum is excellent. I'm very partial to using the dark rum and the dark and stormy. And my husband likes their rock and roll rum, which has some spiciness to it.

NNAMDIThank you very much for your call, Ana. We have some samples that Jaime brought with her here today. So I'll be keeping a very close eye on our production team this afternoon at the afternoon progressive. (laugh) Here's Ricell in Fort Washington, Maryland. Ricell, your turn.

RICELLHi, Kojo. Thank you very much for taking my call. So I want to know if any of you have received endorsements from your local politicians or local celebrities? And what days are you closed?

NNAMDI(laugh) What days are you closed?

WINDONWe are closed two days a year. We're closed on Christmas Day and Thanksgiving Day. Otherwise we are open every other day.

NNAMDIHow about you, Jared?

FACKRELLWow, we are not open that much. We're open Wednesday through Sunday and then we open up on Tuesdays for workshops quite frequently as well.

NNAMDISpeaking of local politicians, it's my understanding, Julie, you ran for Lieutenant Governor of Maryland in the last election. Do you see yourself wading back into the political realm anytime soon?

VERRATTIOther than being a very active citizen, no. And also to answer the caller's question, we're open seven days a week in both of our taproom, restaurant, brewery locations, one in Silver Spring and one in Riverdale Park.

NNAMDIDenizens, Julie, played an important role in Montgomery County's brewing renaissance. Can you tell us about some of the regulations you spearheaded to make the region more brewery friendly?

VERRATTIYeah, absolutely. You know, when we were getting open we actually created a new business model for Montgomery County that hadn't existed before. So I know we opened in 2014. We're not that old of a company, but prior to us opening we were, you know, the first production brewery to open in the county. And so the two things that we got changed, one was to allow for self-distribution within Montgomery County bypassing what was then called the Department of Liquor Control, now called Alcohol Beverage Services.

VERRATTIPrior to getting that law changed, if you were a small producer like Denizens we would've had to manufacture the beer. And then if we had a retailer who wanted to carry our products, we would've had to send it to Gaithersburg first. And then that retailer would've had to buy it directly from the county. Since we got that law changed, we can now send our beer directly to the retailer and bypass that layer.

VERRATTIAnd you can see over the last six years, not only is that a win for manufacturers like Denizens, but tons of other local manufacturers are now selling their beer into Montgomery County. So it's helping manufacturers. It's helping retailers. And it's also, at the end of the day, really helping consumers in terms of the amount of choice that they have.

NNAMDIJulie, according to an article in the Washington City Paper, average earnings for brewery workers in this area, but they said in D.C., are 41 percent below the national average, while those who distribute and sell beer earn some of the highest average wages. What do you see as the reason for that apparent disparity?

VERRATTII think there's, you know, a few things. One is I think that, you know, I'm not totally sure where all that data came from. You know, the folks that I know and ...

NNAMDII think it only came from one source so far.

VERRATTIYeah, I think it was the Beer Institute. I think that, you know, if you look at other sources you might find different data. I do also think, you know, when you're a producer you are a full scale manufacturing company. So you've got tons of overhead, tons of carrying costs that, you know, the second tier of the distribution level don't necessarily have to carry. I mean, other than that, I mean, I'm not really an expert on being able to answer that question.

NNAMDIWell, this one is for all of you, because there's a federal excise tax looming for the alcohol manufacturing business. What would it mean for the alcohol manufacturing businesses if it passes? Jaime, let's start with you.

WINDONTerrible things, Kojo. This federal excise tax cut that is set to expire at the end of the year if nothing is done would mean a 400 percent increase in the excise taxes. And, let me be clear, that's an extra tax that distillers and manufacturers of beverage alcohol pay above and beyond everything else. It would mean a 400 percent increase for small distilleries like myself and all the others across the region. And it would devastate our growth. It would completely set us back to really not good places.

WINDONI mean, in the last two years every distillery I know has taken the savings from this tax cut and reinvested in their team, in their equipment, expanded, doubled locations. Lyon Distilling has grown ten times in size alone in the last two years. And so I shudder to think what will happen if ...

NNAMDIJared, I see you nodding.

FACKRELLYeah, no, I think it's the same kind of consequences for the cider industry. If this act is to go away, you know, for a small producer like us I can't add more staff. I can't expand. You know, we're at a point now where we are kind of to the brim in our current space in trying to meet increased demand from retailers across the city. In order to do that I need capital. But if it -- sort of a death by a thousand cuts. Construct was to come to be with, you know, the excise tax increasing, all these other taxes that are sort of levied on small business like mine, you just don't have enough to kind of feed all the mouths that are coming to you.

NNAMDIJulie Verratti.

VERRATTIOh, I've got lots of opinions on this one. You know, first I just want to say that there's actually a staggering level of bipartisanship on the hill right now to support extending the federal excise tax reduction. As of today there are 323 house members and 73 senators that have co-sponsored the legislation to keep this reduction permanent or extended.

VERRATTIIf you look at some of the numbers just in beer alone, the average amount of jobs that the beer industry was creating, and I mean small brewers specifically in the country prior to 2018 when this reduction was created, was about 5,000 jobs a year, which is nothing to sneeze at. But if you look at what happened in 2018 which was the first year that the federal excise tax was reduced, there were 15,000 jobs created. So that's more than a twofold increase in job creation.

VERRATTIYou know, we at Denizens ...

NNAMDIWe only have about a minute left.

VERRATTI...we just expanded in the last year. And having this federal excise tax reduction was one of the huge reasons why we were able to afford to do that.

NNAMDII'm afraid we're just about out of time. Julie Verratti is chief brand officer and founder of Denizens Brewing Company in Silver Spring, Maryland and the member of the board of directors for both the Brewers Association and the Brewers Association of Maryland. Julie, thank you for joining us.

VERRATTIThank you, Kojo.

NNAMDIJaime Windon is CEO and founder of Lyon Distilling Company in St. Michaels, Maryland. She serves as president of the Maryland Distillers Guild. Jaime, thank you for joining us.

WINDONThank you.

NNAMDIAnd Jared Fackrell is owner of Capitol Cider House in Washington, D.C. Jared, thank you for joining us.

FACKRELLThank you so much, Kojo.

NNAMDIAnd I do have to underscore that during the course of this discussion we've been talking about drinking an alcohol, but we absolutely do not encourage drinking to excess. We got an email from Rob who said, you asked in the teaser are we that thirsty. According to both the Centers for Disease Control and Prevention and the Substance Abuse and Mental Health Services Administration, D.C. has the worst excessive alcohol consumption in the country. A more fine-grade report from (word?) says that Ward 2 and Ward 1 are the worst in the city.

NNAMDII should also remind you that we have done several broadcasts on this show about the cultural shift on drinking, people choosing not to drink and the rise of mocktails. So we're not encouraging excessive alcohol drinking. Today's conversation about distilleries, cideries and breweries was produced by Julie Depenbrock, and our segment about Christmas trees was produced by Lauren Markoe.

NNAMDIComing up tomorrow on The Politics Hour, Virginia Delegate Elect John Bell won one of the most highly-contested races in the Commonwealth, plus a unanimous D.C. council vote favoring the removal of Council Member Jack Evans, the longest sitting council member. That all starts tomorrow at noon on The Politics Hour. Until then, thank you for listening. I'm Kojo Nnamdi.