Fighting New York’s unfair restrictions on out-of-state distilleries

While working in real estate in his native California, Théron Regnier’s passion for spirits and cocktails led him to make a career pivot. On St. Patrick’s Day 2020, Théron filed paperwork to establish The Obscure Distillery. 

The timing was both a blessing—the number of craft distilleries in the nation grew from just 75 to 2,283 between 2006 and 2022—and a curse: The Obscure Distillery opened for business on the eve of the 2020 COVID-19 pandemic. Undeterred, Théron began selling directly to California consumers. The Obscure’s taproom finally opened in 2022, offering downtown LA visitors a “guided tasting” experience in a fantasy-themed setting, with storytelling for each tasting.  

Today, The Obscure attracts more than 30,000 visitors a year from all over the country, many of whom want spirits from their tasting experience shipped to their home states. This includes New York, which has a special connection to the distillery. The Obscure makes a special rye whiskey using chestnut tree trimmings from the American Chestnut Foundation’s New York chapter. It then donates 10% of this whiskey’s sales to support the Foundation’s work. 

New Yorkers are out of luck, however, because of a recent state law that kneecaps out-of-state distilleries from fairly competing. The law allows in-state craft distilleries to ship spirits directly to New Yorkers, rather than going through the standard alcohol distribution system of selling through retailers. However, out-of-state distilleries can ship to New York only if their home state offers reciprocal privileges to New York distillers. 

Because California doesn’t have reciprocity with New York, The Obscure is prohibited from shipping directly to New York consumers.   

It is true that California’s law is discriminatory too. But just because California has a discriminatory law doesn’t mean that New York is allowed to discriminate against businesses in California. It is unjust to burden hardworking entrepreneurs with additional, onerous hurdles that limit market access and economic opportunity to businesses located out of state. New York has created an unfair trade barrier, violating the Constitution’s Commerce Clause. 

Represented at no charge by Pacific Legal Foundation, Théron and The Obscure Distillery are fighting back with a federal lawsuit challenging New York’s discriminatory treatment of out-of-state distilleries.