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Heritage closing tasting rooms in Washington and Oregon, including here
Gig Harbor-based Heritage Distilling will close its tasting rooms in Washington and Oregon effective Dec. 31, the company announced Wednesday, Oct. 22.
That includes Heritage’s flagship outlet on the corner of Pioneer Way and Harborview Drive in Gig Harbor.
Tasting rooms in Roslyn and Tumwater, as well as two in Eugene, Ore., also will close.
Those that are part of Heritage’s Tribal Beverage Network, including at Angel of the Winds Casino in Arlington, will remain open.
According to a news release announcing the move, Heritage expects to “reduce ongoing operating expenses by more than $5 million on a full-year basis and accelerate profitability in the Company’s craft spirits segment.”
Heritage Distilling will close its Gig Harbor tasting room, and others in Washington and Oregon, on Dec. 31. Photo by Vince Dice
Products will remain available
Heritage plans to partner with another distillery to continue to produce its spirits. Customers will still be able to buy Heritage products online, through partners and through its direct-to-consumer service, founders Justin and Jennifer Stiefel said.
“The spirits business isn’t going away. It just won’t happen in Oregon and Washington,” Jennifer Stiefel told Gig Harbor Now.
Fifty-eight Heritage employees will lose their jobs. The distillery is offering incentives for employees to stay through the end of the year, including severance packages.
The Stiefels — Justin is the CEO/chairman and Jennifer is the president — attributed the move to several factors, including:
- The high cost of operating a business in the Northwest, including new taxes and regulations and steadily increasing wages.
- An overall downturn in alcohol sales.
- Their responsibility to shareholders after going public in November 2024.
“If you look at, ‘Where are the most expensive states?’ It’s all in the Northeast, and California, Washington and Oregon,” Justin Stiefel said. “These states just continue to pile on regulations and taxes.”
Justin and Jennifer Stiefel, co-founders of Heritage Distilling Company of Gig Harbor. Heritage Distilling Company
Heritage shares
Heritage’s recent filings with the federal Securities and Exchange Commission, required for a public company, reflect the company’s and the industry’s struggles.
The Gig Harbor company’s shares closed trading at $0.5907 on Wednesday. They opened at $4 during the company’s initial public offering less than a year ago.
NASDAQ raised the specter of delisting Heritage in April because its stock had been below $1 per share, the index’s minimum bid price, for 30 consecutive business days. NASDAQ gave Heritage 180 days to return to compliance.
On Oct. 14, NASDAQ agreed to give Heritage another six months to recover its stock price. According to a report to the SEC posted on Heritage’s website, NASDAQ granted the reprieve because Heritage continues to meet all other requirements for listing — and because the distillery promised to implement a reverse stock split if necessary to bring its stock back above $1.
Shoppers browse inside Heritage Distilling Company’s Gig Harbor tasting room in 2022. Photo by Julie Warrick Ammann Julie Warrick Ammann
Investor.gov, a U.S. Securities and Exchange Commission website, describes a reverse stock split as converting each outstanding share of a company into a fraction of a share.
“A company may declare a reverse stock split in an effort to increase the trading price of its shares – for example … in an attempt to regain compliance with minimum bid price requirements of an exchange on which its shares trade,” according to the website.
Taxes and regulations
The Stiefels pointed to increased state taxes as a major factor in their decision.
Justin Stiefel particularly highlighted recent increases in the gas, business and occupation, and capital gains tax rates in Washington state.
In some cases, Heritage might not pay those taxes directly. But the distillery’s costs increase because the taxes hit its suppliers.
Stiefel said more tax increases likely will be on the horizon. A Washington state revenue forecast in September projected tax receipts to be down a half-billion dollars since Gov. Bob Ferguson signed the state budget in April.
Sen. June Robinson, D-Everett, told the Washington State Standard that lawmakers “may have to look at tax levers” again next winter. Robinson is the state Senate’s lead budget writer.
Heritage Distilling’s tasting room at the corner of Pioneer Way and Harborview Drive will close on Dec. 31. Photo by Vince Dice
That could include property tax increases. The 2025 Legislature narrowly rejected a proposal to increase the voter-approved cap on annual property taxes from 1% to 3%.
Justin Stiefel mentioned that possibility multiple times during a 45-minute conversation with Gig Harbor Now. Heritage leases its property, but would feel the pain of any property tax increases through its rent payments.
Several of those leases will be up for renewal soon.
“We just could not in good conscience sign additional three- to five-year leases on these places, not knowing there were good partners in the Legislature for small business,” Stiefel said.
Fewer Americans drinking
Stiefel said recent tariff increases have not affected Heritage, “because we’ve never sold to Canada, or Scotland or Europe.” However, a change in American drinking habits has impacted Heritage’s bottom line.
A Gallup survey released in August found that just 54% of Americans say they consume alcohol. That’s the lowest drinking rate in the 90 years Gallup has tracked alcohol consumption.
As recently as 2022, 67% of Americans reported using alcohol.
The whiskey industry has been particularly hard hit, according to Fast Company magazine. Heritage offers a variety of bourbons and other whiskeys.
Heritage’s balance sheet reflects that dry trend. According to a second-quarter report posted on the company’s website, its total net sales were down over $500,000 for the second quarter of 2025 compared to the same period of 2024.
Net sales declined by more than $1 million for the first two quarters of this year compared to last.
Pivot to crypto
Heritage hopes to soften the blow of the declining alcohol sales through its involvement in cryptocurrency and intellectual property markets.
In May, the Heritage board of directors approved a “Cryptocurrency Treasury Reserve Policy,” which allowed the company to accept Bitcoin and Dogecoin as payment.
The company later announced a Bitcoin Bourbon and a House of Doge Bourbon, with cryptocurrency giveaways to promote both launches.
Heritage dove deeper into the new enterprise in August, when it announced a private investment in public equity agreement “to purchase $IP tokens from Story Foundation.”
The company touted the transaction as “a strategic milestone for Heritage, making it the first Nasdaq-listed company to adopt $IP as its primary reserve asset. $IP is the native token of Story, a blockchain that enables users to register their intellectual property onchain and add usage terms via smart contracts. …”
In an SEC filing, Heritage described its business as now having “two segments:
- “IP Management Infrastructure: this segment executes and manages our treasury policy, operates our validators and operates infrastructure to allow IP owners to manage, track and monetize their IP through the $IP token and the Story ecosystem; and
- “Craft Spirits: this segment executes and manages our craft distillery business, including producing, marketing and selling our lines of award-winning craft spirits and the development of our Tribal Beverage Network.”
Around the same time, the company changed its NASDAQ ticker symbol from CASK to IPST.
Jennifer Stiefel said this week that the company’s partnership with Story Foundation helped allow Heritage to offer generous benefits to laid-off employees, including paying out sick leave and offering severance pay to those who remain with the distiller through Dec. 31.
‘Most awarded craft distillery’
Even as it delves into the crypto world, there can be no doubt that the Gig Harbor-based distiller has been a successful maker of whiskey. Heritage bills itself as “the most awarded craft distillery in North America for the last 10 years by the American Distilling Institute.”
Its products routinely win top awards in distillery contests. Recently, Whisky Magazine selected Heritage’s Cocoa Bomb Chocolate Whiskey as Best Flavored Whiskey in the U.S.
Various organizations have recognized the Stiefels as business and civic leaders. Heritage is an active donor in the community.
The distillery is also a noted supporter of the military and veterans. Several Heritage labels pay tribute to military service members, with a portion of proceeds from sales going to nonprofits supporting veterans.
Local Heritage locations
The Stiefels, along with Drew and Sara Kellerman, founded Heritage in 2011.
Locally, Heritage operates a warehouse on Bujacich Road and the high-profile tasting room at the corner of Pioneer and Harborview. The company also operates a warehouse on Bujacich Road, which also will close.
On busy summer afternoons, the Gig Harbor tasting room is typically packed with customers.
“That’s a profitable location,” Justin Stiefel said. “But when you take away the other parts of the support infrastructure … it creates unprofitability immediately.”
Three current or planned locations that are part of the Tribal Beverage Network will continue. One exists already at Angel of the Winds casino in Arlington. Two more are planned — at Mazatazal Casino in Payson, Arizona; and at The Mill Casino and Hotel in Coos Bay, Oregon.
Justin Stiefel noted that tribes, not Heritage, own those facilities. And since they are on tribal land, they don’t face the same tax challenges as other Heritage locations.
Heritage previously closed tasting rooms in two Seattle neighborhoods — in Ballard in 2023, after five years in operation; and in Capital Hill in 2020, after less than two years.
Difficult decision
Both Stiefels said the decision was a difficult one and expressed regret for employees losing their jobs. But they feel it’s the right move for their business and themselves.
“On a personal level, we’re a little tired,” Jennifer Stiefel said. “As entrepreneurs, you never start a company thinking you’re going to end it or pivot in a way that we didn’t first envision it.”
Justin Stiefel said Heritage has enjoyed a strong relationship with the city of Gig Harbor and the broader community.
The decision to close the tasting rooms has “been a thoughtful process,” he said. “It’s not easy for anybody. Nobody walks away from this happy, but numbers are what they are.”
Justin Stiefel later added:
“In the U.S. we have this freedom of mobility and movement. We can choose to do things in other places where it makes sense to do it economically.”
Inside Heritage Distilling Company’s Gig Harbor tasting room in 2022. Julie Warrick Ammann