Cannon Beach Distillery will close at the end of March after owner Mike Selberg didn’t find any buyers or partners who fit his vision.
Selberg announced in July the impending sale or closure of the distillery, arguing the state tax structure has made it impossible to make any headway as a small, craft distiller. He recently announced the impending closure in a letter to customers online.
In the letter, Selberg said he reached out to several interested buyers or partners but couldn’t get over the feeling that he was giving up something special.
“In the end, I couldn’t stomach Cannon Beach Distillery becoming anything different,” he wrote. “I have so much pride in the integrity of this company. We have produced every single drop of spirit from a raw ingredient, and focused entirely on quality with an artistic flair ... to tremendous success reflected in the reputation of our spirits.”
A biology major in college, Selberg in 2012 opened the craft artisan distillery in Cannon Beach, where he had spent summers as a child and wanted a way to live year-round. He has focused on one-off batches, the vast majority of his products being sold in his Hemlock Street tasting room.
Selberg has criticized the Oregon Liquor Control Commission for taxing a third of his bottle sales despite not handing the liquor at the tasting room, and for taxing bottles based on retail value rather than volume. He argues the tax structure disadvantages small, craft distilleries like his that focus on quality and creativity in favor of larger operations that focus on turning out lower-cost, industrially produced liquor.
His concerns mirrored those of Larry Cary, who started Astoria’s Pilot House Distilling with his wife, Christina, in 2014. Buoy Beer Co. bought a majority stake in Pilot House last year in a bid to help the startup distillery and find a new area for growth amid a tightening beer scene.
Recently married, Selberg plans to move with his equipment to Colorado to be with his wife. He estimates he’ll pay one-fifteenth of the taxes there because liquor is taxed by volume instead of retail price.
“In the end, this type of business has little value in the state of Oregon, but potentially has immense value in a state like Colorado,” Selberg said. “I was confronted with a choice to sell my business for diminished value here, or retain everything and try again in a state more suited to small craft distilleries. I’m in a privileged situation where I can make that happen.”
The Cannon Beach tasting room will stay open through March. The distillery produced a large inventory as part of one of his potential deals, Selberg said. Anything he doesn’t sell at the tasting room will go into state distribution.
“As I said in my letter, I am immensely proud of what we have accomplished here. Cannon Beach Distillery will stand historically as one of the premier and most decorated Oregon distilleries,” Selberg said. “Hopefully our closing will be a strong message to the (Liquor Control Commission) and the state Legislature that their policies desperately need to change.”