How To Start a Distillery in Ontario

So, you’re thinking about getting into the distillery business in Ontario? That’s awesome! Starting a distillery can be a really rewarding adventure, but let’s be real, there are quite a few hoops to jump through. From getting your license to figuring out how to sell your amazing creations, it can feel like a lot. But don’t worry, this guide is here to help you break it all down. We’ll walk through the steps you need to take to successfully start a distillery in Ontario, making sure you’re ready for everything that comes your way.

Whether you want to produce and sell rum, gin, whiskey, vodka, brandy, or other spirit in Ontario, Substance Law is here to help.

Key Takeaways

• To get a distillery license, you have to be at least 19 years old, show you’re financially responsible, and prove you’ll run your business honestly and with integrity.
• Distilleries can store their products at other places in Ontario, not just their main site, to help with distribution. But remember, you can’t sell from these off-site spots.
• When you apply for your license, be ready to show a solid business plan. This plan should include details about your products, how your facility is set up, and where you plan to sell your spirits.
• If you want to sell your spirits for people to drink right there at your distillery, you’ll need a special ‘By-the-Glass’ endorsement. This is mostly for promoting your products and giving visitors a good experience.

So, you’re thinking about opening a distillery in Ontario? That’s awesome! But before you start dreaming of awards and fancy bottles, there’s some paperwork to get through. Getting your distillery license is the first big step, and it’s important to get it right. The Alcohol and Gaming Commission of Ontario (AGCO) is who you’ll be dealing with, and they have rules. Lots of them.

Eligibility Criteria for a Distillery License

Okay, first things first: are you even eligible? The AGCO has some pretty clear requirements. You need to be at least 19 years of age. They also want to make sure you’re financially responsible – no surprise there. And, maybe most importantly, you need to run your business with honesty and integrity. That might involve police checks on you and anyone else involved in the business. Also, you generally can’t have any direct or indirect financial stake in a place that already has a license sales license, like a bar or restaurant. There are exceptions, but that’s the general rule.

Required Supporting Documents for Your Application

Alright, so you think you’re eligible? Great! Now comes the fun part: gathering all the documents. When you apply for your Distillery Licence online through the iAGCO portal, you’ll need to provide a bunch of stuff. Think of it like applying for a mortgage, but for booze. You’ll need detailed information about your business, your facility, your financial situation, and probably a whole lot more. It’s best to check the AGCO website for the most up-to-date list, because things can change.

Key Liquor Industry Contacts for Starting a Distillery in Ontario

Before you even start filling out the application, it’s a good idea to get in touch with a few key people. The LCBO is a big one – they handle product testing, and you’ll need to know their requirements. The AGCO website has a list of contacts, and it’s worth reaching out to them early on. They can answer questions and point you in the right direction. Trust me, it’s better to ask for help now than to get stuck later on.

Starting a distillery is a big undertaking. It’s not just about making great spirits; it’s about navigating a complex regulatory landscape. Take your time, do your research, and don’t be afraid to ask for help. With the right preparation, you can turn your dream into a reality.

Navigating Distribution and Warehousing for Your Distillery

So, you’ve got your distillery up and running, and now you’re probably thinking, “How do I actually get my product out there?” Distribution and warehousing are key. It’s not just about making great spirits; it’s about getting them into the hands of people who want to drink them. Let’s break down what you need to know.

Distributing Your Own Spirits and Other Manufacturers’ Products

Okay, first things first: you can distribute your own spirits. This means handling the transportation and warehousing yourself. You can also make arrangements with another licensed manufacturer or even someone who isn’t licensed by the AGCO to distribute for you. Just remember, even if someone else is doing the actual distribution, you’re still responsible for making sure everything complies with the rules. You can even distribute beer of another manufacturer under certain conditions. If you’re distributing liquor you didn’t make, you can provide transportation and warehousing, but you can’t buy or sell it.

Utilizing Off-Site Storage Facilities in Ontario

Space can be a real issue, especially as you grow. The good news is that you’re allowed to use off-site storage facilities in Ontario. These can be great for extra storage or to help with distribution. However, there are some big restrictions. You can’t use these warehouses to promote, take orders, or sell liquor directly to consumers. Think of them as storage and logistics hubs, not retail outlets. Also, products sold for delivery to customers from a retail store must be delivered from that retail store.

Maintaining Records for Off-Site Storage

This is where the paperwork comes in. If you’re using off-site storage, you must keep detailed records of where those facilities are located. The AGCO can ask for this information at any time, so it’s important to stay organized. Think of it like this: if you can’t prove where your inventory is, it’s like it doesn’t exist. Keep track of everything, and you’ll save yourself a lot of headaches down the road.

It’s important to remember that while you can use third-party carriers or delivery services, you’re ultimately responsible for making sure they follow all the rules. This includes age verification, not delivering to intoxicated individuals, and adhering to any other regulations set by the AGCO. Don’t just assume they know what they’re doing; make sure they do.

Applying for Your Distillery License

Getting your distillery license is a big step, and it involves a few key stages. It’s not just about having a great recipe; you have to meet specific government requirements and submit a solid application. Think of it as the official start of your journey from enthusiast to business owner.

General Eligibility Requirements for Distillery Applicants

Before you even think about filling out forms, you need to see if you qualify. The Alcohol and Gaming Commission of Ontario (AGCO) has a few baseline rules for anyone wanting to apply for a distillery license. It’s pretty straightforward stuff, but you have to tick all the boxes.

• You must be at least 19 years of age.
• You need to be considered financially responsible.
• You have to conduct your business with honesty and integrity, which may involve background checks for you and other key people.

It’s also important to know that you generally can’t have a direct financial interest in a business with a liquor sales license, like a bar or restaurant. This rule is meant to keep the manufacturing and selling sides of the industry separate.

Submitting Your Application Through the iAGCO Portal

Forget about paper forms and long lines. The entire application process is handled digitally. You will need to create an account and submit everything online through iAGCO, the official portal for these applications. This system is where you’ll fill out your information, upload documents, and track the status of your application. It’s designed to make things a bit easier since you can save your progress and come back to it.

Take your time and double-check every piece of information before you submit. A simple typo or a missing document can lead to significant delays, so it pays to be careful and thorough from the start.

Essential Documents for Your Distillery License Application

When you’re ready to apply, you’ll need to have several key documents prepared. Gathering these ahead of time will make the process much smoother. The portal will prompt you for them, but it’s good to know what’s coming.

1. Tax Compliance Verification Number: This is a number you get from the Ministry of Finance. It confirms that your tax affairs are in order, which is a non-negotiable requirement.
2. Business Plan Summary: You’ll need to provide a summary of your business plan. This should include a full description of the spirits you intend to produce on-site.
3. Personal and Corporate Information: You’ll need to provide detailed information about yourself, any partners, and the corporate structure of your distillery.

Key Business Plan Components for Your Distillery

Crafting a solid business plan is essential for any distillery aiming to thrive in Ontario. It’s more than just a formality; it’s your roadmap to success, guiding you through the complexities of production, sales, and compliance. A well-thought-out plan not only attracts investors but also keeps your operations on track.

Detailed Product Descriptions and Manufacturing Processes

Your business plan needs to clearly outline what you intend to produce. Go beyond just naming the spirits; describe their unique characteristics, target market, and competitive advantages. Detail the entire manufacturing process, from sourcing raw materials to bottling and labeling. This section should demonstrate your understanding of the craft and your commitment to quality. For example, if you’re planning a gin, describe the botanicals, the distillation method, and the intended flavor profile. If you’re planning a whisky, describe the grains, the fermentation process, and the aging process.

Facility Layout and Retail Store Integration

Include detailed floor plans of your distillery, highlighting the location of key equipment, storage areas, and any retail space. Consider how the layout impacts efficiency, safety, and customer experience. If you plan to operate a retail store, explain how it integrates with the production area and enhances the overall distillery experience. Think about traffic flow, accessibility, and the visual appeal of the space. The distillery projects completed by Dennis Group are a great example of how to optimize space.

Sales Channels and Manufacturing Locations

Outline your sales strategy, identifying all the channels you intend to use to reach your target market. Will you focus on direct sales through a distillery retail store, distribution through the LCBO, sales at farmers’ markets, or a combination of these? If you plan to manufacture your products at a facility other than your own, provide complete details of the arrangement.

A comprehensive business plan is your distillery’s blueprint for success. It demonstrates your vision, your understanding of the market, and your ability to execute your plans effectively. Don’t underestimate the power of a well-crafted plan to attract investors, secure funding, and guide your operations.

Here’s a simple example of how you might structure your sales projections:

Sales Channel	Year 1 (Units)	Year 2 (Units)	Year 3 (Units)
Distillery Retail Store	5,000	8,000	12,000
LCBO Distribution	2,000	4,000	6,000
Farmers’ Markets	500	800	1,200

Federal and Provincial Compliance for Distilleries

Starting a distillery isn’t just about crafting the perfect spirit; it’s also about adhering to regulations. You’ve got both the federal government and the Ontario provincial government to keep happy, and that means licenses, tests, and paperwork. It can feel overwhelming, but getting it right from the start will save you headaches down the road.

Obtaining Your Federal Excise License

First things first, you absolutely must get your federal excise license. This license, issued under the Excise Act and the Excise Act, 2001 (administered by the Canada Revenue Agency), is non-negotiable if you plan on producing or packaging spirits in Canada. Think of it as your permission slip from the big leagues. Without it, you’re operating illegally, and the penalties can be severe. Make sure you start this process early, as it can take some time to get approved. You’ll need to provide detailed information about your business, your production process, and your security measures.

LCBO Product Testing Requirements

Before you can even dream of seeing your bottles on LCBO shelves, you’ll need to jump through the product testing hoops. The LCBO has strict standards for what they’ll sell, and that includes rigorous testing of your spirits. This isn’t just about taste; it’s about safety, quality, and consistency. You’ll need to submit samples of your product to the LCBO for laboratory testing, and yes, there are fees involved. Contact the LCBO early in the process to get all the details, including the specific tests required and the associated costs. It’s a good idea to factor these costs into your budget from the get-go.

Registering Your Business Name in Ontario

Don’t forget the basics! Before you start selling, you need to officially register your business name in Ontario. This is a pretty straightforward process, but it’s a crucial step in establishing your distillery as a legitimate business. You’ll need to check that your desired name isn’t already taken and then register it with the Ontario government. This registration gives you the legal right to operate under that name and is often required for opening bank accounts and obtaining other licenses and permits.

Compliance is an ongoing process, not a one-time event. Stay up-to-date on any changes to regulations and be prepared for periodic inspections by the AGCO. It’s better to be proactive and informed than to face fines or other penalties down the line.

Exploring Retail Opportunities for Your Distillery

So, you’ve got your distillery up and running. Now it’s time to actually sell your spirits! Ontario offers a few different avenues for distilleries to get their products into the hands of consumers. Let’s explore some options.

Operating a Distillery Retail Store

One of the most direct ways to sell your spirits is by opening a retail store right at your distillery. This allows you to control the entire customer experience, from the moment they walk in the door to the moment they leave with a bottle of your finest whiskey. You can offer tastings, tours, and even sell merchandise to promote your brand. Think of it as your own little spirits showroom. It’s a great way to build a loyal following and get direct feedback on your products. Make sure your facility layout integrates a retail store seamlessly.

Selling at Farmers’ Markets and Industry Events

Farmers’ markets and industry events can be fantastic opportunities to reach new customers and build brand awareness. These venues often attract people who are interested in local, craft products, making them a perfect target audience for your spirits. Plus, it’s a chance to connect with customers face-to-face and share your story. It’s not just about sales; it’s about building relationships. You can also offer practical demonstrations of distillation at these events.

Eligibility for Farmers’ Market and Event Participation

Before you pack up your bottles and head to the nearest farmers’ market, it’s important to understand the eligibility requirements. Generally, you’ll need to obtain the proper permits and licenses to sell alcohol at these events. The Alcohol and Gaming Commission of Ontario (AGCO) has specific rules about who can participate and what they can sell. Make sure you check their website for the most up-to-date information. You’ll also want to consider the marketing for your distillery to maximize your efforts.

Participating in farmers’ markets and industry events can be a great way to boost your distillery’s visibility and sales. However, it’s important to do your homework and make sure you meet all the requirements before setting up shop. Don’t forget to factor in the costs of booth fees, transportation, and staffing when evaluating the potential return on investment.

Understanding the By-the-Glass Endorsement

So, you’re thinking about letting people sample your spirits right at your distillery? That’s where the By-the-Glass Endorsement comes in. It’s basically permission from the AGCO to sell and serve your own manufactured spirits for on-site consumption. Think of it as turning part of your distillery into a tasting room. It’s a cool way to boost sales and give people a real feel for what you do. Let’s get into the details.

Purpose of the By-the-Glass Endorsement

The main idea behind the By-the-Glass Endorsement is to let distilleries offer an enhanced tourist experience or provide some kind of educational opportunity. It’s not just about slinging drinks; it’s about showcasing your craft. This endorsement allows distilleries to sell and serve their spirits for consumption on-site, directly promoting their products and engaging with customers. It’s a chance to tell your story, explain your process, and let people taste the results firsthand. It can really help build a loyal following.

Eligibility for By-the-Glass Sales

Not every distillery automatically qualifies. Here’s the deal:

• You must already have a valid Distillery License in Ontario.
• You can only sell and serve spirits that you’ve actually made yourself at your distillery. No reselling other people’s stuff under this endorsement.
• The area where you’re serving drinks needs to be under your sole control and right next to your production site. Think tasting rooms, patios, or designated areas within your distillery.

Basically, if you meet those criteria, you’re in the running. It’s all about keeping things focused on your own production and ensuring you’re responsible for what happens on your property.

Operational Restrictions for On-Site Consumption

Okay, so you’ve got the endorsement. Now what? There are a few rules to keep in mind:

• You can’t just set up a bar anywhere. The consumption area needs to be directly connected to your distillery and under your control. Public roads, parking lots, and places that could cause safety issues are off-limits.
• Guests can move around with their drinks within the areas covered by your By-the-Glass Endorsement or a Liquor Sales Licence (if you have a

Wrapping Things Up

So, there you have it. Starting a distillery in Ontario might seem like a lot, with all the rules and paperwork. But honestly, if you take it step by step and do your homework, it’s totally doable. Think about all the cool spirits you could be making and sharing. It’s a big adventure, for sure, but with a good plan and some hard work, you can really make your mark in Ontario’s growing distillery scene. Good luck out there!

Frequently Asked Questions

What are the main things I need to be to get a distillery license?

You need to be at least 19 years old, be good with money, and act honestly and with good morals. This might include background checks by the police. Also, you generally can’t own a bar or restaurant that sells alcohol if you want to run a distillery.

Can I store my distillery’s products somewhere other than my main factory?

Yes, you can use other places in Ontario to store your products, as long as they are not at your main production site. But you can’t sell or take orders from these storage spots, and you can’t use them to deliver directly to customers. You must keep good records of where all your stored alcohol is.

What should I do before I send in my distillery license application?

Before you send in your application, you should get in touch with the LCBO. They can tell you about the tests your products need to pass. Also, make sure you have all the documents ready that the AGCO asks for when you apply online.

What does a ‘By-the-Glass Endorsement’ mean for my distillery?

A ‘By-the-Glass Endorsement’ lets your distillery sell and serve your spirits for people to drink right there at your production site. This is usually to show off your products, make the visit better for tourists, or for teaching purposes.

Can my distillery sell products at farmers’ markets or other events?

Yes, you can sell your spirits at farmers’ markets and special industry events. For farmers’ markets, you can sell for up to 3 days a week. For industry events, you can sell for up to 10 days in a row. Any spirits you don’t sell must be taken back to your distillery’s store within 72 hours.

What are the rules for selling my spirits at farmers’ markets or events?

You need to have a valid AGCO Manufacturer’s Licence for distilleries and a retail store at your distillery. Also, at least half of the spirits you sell at these events must be made from start to finish at your Ontario production site.