[Some] states, increasingly aware of the power of agri-business to generate tourism and tax dollars, have gradually begun loosening some of the temperance-era laws that have lingered for decades, restricting who can distill what, and where.[...]
The heyday for small distillers was actually during Prohibition, which failed to deter extralegal production across the country. But after Prohibition’s repeal, each state was given broad powers to regulate the sale and distribution of alcohol, with an overlay of some standing federal requirements. Some states adopted stringent laws.
(Home distilling is still against the law, largely because of the safety hazards of working with flammable liquids. At minimum, distillers must be licensed by the federal government and a state.)
Over the past years, though, small steps have been taken toward loosening state regulation — moves that probably have as much to do with bringing in revenue as anything going on with consumer tastes.