If the Governor has his way, beer made in South Dakota will flow in much larger quantities as early as this summer.
Gov. Dennis Daugaard proposed easing up some regulations on microbreweries in South Dakota during his State of the State address Jan. 9. He said those laws date back to prohibition and need to be updated.
His proposal would increase yearly caps from 5,000 to 30,000 barrels for the state's licensed microbreweries. Currently, if brewers go over the barrel cap they risk losing the ability to sell beer from the increasingly popular tap rooms at breweries.
A cap of 5,000 barrels (roughly 155,000 gallons) of beer may seem like a lot, but that number is a fraction of the beer cap that neighboring states have. North Dakota, Wyoming and Montana all have barrel caps more than five times as high as South Dakota's current limits and Iowa has no limit at all.
The new legislation would also allow microbreweries to sell directly to retailers, something Daugaard said will help South Dakota businesses compete with those surrounding states.
“The statutes in this area (microbrewing) are a mess, and in many cases, they just don’t make sense,” Daugaard said during his address on Tuesday. “I’ll be supporting several bills this session to streamline and modernize these statutes.”
For microbreweries like Lost Cabin Brewing, the easements come as a welcome relief. Lost Cabin’s co-founder, Jesse Scheitler, said the company is already one fifth of the way to the current 5,000 barrels.
Scheitler said the brewery has only been open for a year and he hopes to keep expanding his business, but the current yearly barrel cap could make that difficult. Scheitler thinks the new limit will modernize South Dakota’s outdated regulations.
“As far as for the state itself, I think beer kind of bridges South Dakota’s two biggest industries … tourism and agriculture,” he said.
Lost Cabin, located on West Omaha Street across from Founders Park, serves ales, lagers and porters to Rapid City residents. Their most popular drinks are their Father in Lager and the Lord Grizzly Scotch Ale. If the bill passes, they’ll be able to sell those brews right to restaurants and grocery stores as soon as this summer.
Daugaard’s chief of staff, Tony Venhuisen, said the regulation changes could take place July 1.
“South Dakota’s laws governing microbreweries are burdensome and out of line with other states and hinder these businesses from growing,” Venhuisen said. “ … The changes will increase the viability of microbreweries and increase their ability to grow.”
For brewers like Scheitler, a larger barrel cap could mean a better community.
“We’re not only manufacturing a product here, but we also actively work in our communities.”