State now has highest per-capita number of distilleries in U.S. based on population

Two Clackamas County land deals are at the center of expanding operations for the state's growing liquor operations.

On March 17, the Oregon Liquor & Cannabis Commission approved a plan to transfer a section of land, where the current OLCC warehouse and headquarters is located in Milwaukie, to the county government. The county has been leasing that portion of the land, which is split by Johnson Creek, to operate separate men's and women's community corrections center buildings owned by the county to provide rehabilitation services for drug and alcohol offenses.

Meanwhile, the OLCC selected a location in Canby as a site for a future warehouse to use for the statewide distribution of liquor. In a special meeting on March 8, the liquor commission approved a sales agreement for the property, where an estimated $145.8 million warehouse project is planned.

This month the Oregon Legislature approved an increase in the OLCC's bonding authority for the proposed warehouse, since the market-wide rise in construction costs increased the projected cost of the warehouse project from $62.6 in 2019.

OLCC Commissioner Jennifer Currin from Pendleton said that the proposed location in Canby not only made sense for distribution logistics near Interstate 5, but also because added warehouse space could accommodate a greater selection for consumers.

"It's easy to get to and serve our customers," Currin said. "If we're going to continue to be able to offer the diversity of products, the amount of products, be able to get products to our customers and also make money for the state, this is going to be an investment that will truly pay off."

Under the terms of the existing Milwaukie property's lease that was agreed to decades ago, there were two options when the lease ended; OLCC would have had to compensate the county for the assessed value of the correction center buildings, or the county would have to remove their buildings at their expense and restore OLCC's land to its original condition. OLCC commissioners decided that neither of these approaches would have been in the public interest, so they negotiated a new deal with county officials.PMG FILE PHOTO - The Oregon Liquor & Cannabis Commission directed liquor stores to stop selling Russian-made spirits on Feb. 28, days after Russia's military invasion of Ukraine.

Under the terms of the land transfer, the OLCC won't charge the county for the land, which Clackamas County has been leasing for one dollar a year, with an agreement that Clackamas County will pay all costs associated with the land transfer.

OLCC's recent land deals come amid growth for the alcohol industry. According to the Oregon Distillers Guild, there are now 78 craft distilleries in Oregon, more than the 71 in the bourbon-famous state of Kentucky, which gives Oregon the highest per-capita number of distilleries in the U.S. based on population. Annual sales from Oregon craft distillers at OLCC liquor stores, which guarantee shelf space for Oregon distilled products, increased from $63 million in 2020 to $67 million in 2021.

State liquor officials said that without added capacity, the OLCC's ability to store and supply liquor products would level off, as would tax revenue generated to support Oregon's governmental programs.

"This is a great strategic plan to support local Oregon businesses. We have room to grow with this decision," said OLCC Commissioner Kiauna Floyd, owner of Amalfi's Italian Restaurant in Portland. "Positioning OLCC to be able to provide faster and more efficient service to liquor stores in turn allows liquor stores to provide timely deliveries to Oregon's hospitality industry."

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