Popular Pierce County distillery closed tasting rooms. Is crypto the reason?
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- Heritage Distilling Co. recently announced it will close all of its tasting rooms.
- Company adopted cryptocurrency payments and launched a $360M $IP token treasury reserve.
- Expert says crypto exposure can risk cash flow and operating stability for daily expenses.
Did Heritage Distilling Co.’s integration of cryptocurrency into their business model influence their decision to close their tasting rooms?
The craft distillery opened its first location in Gig Harbor in 2012, going on to open a total of five tasting rooms throughout Washington and Oregon, including in Tumwater. Their line of spirits includes whiskeys, vodkas, gins, aquavit and rums, along with canned cocktails.
The family-owned business is now a publicly traded company and one of the largest craft distilleries on the West Coast, according to the Tribal Convenience Store Association. The distillery’s resume includes three wins in the World Whiskies Awards for “World’s Best Flavoured Whisky,” including last year when they won the title for their Cocoa Bomb Chocolate Whiskey.
After spending more than a decade in Gig Harbor and four years in Tumwater, the company’s announcement Oct. 23 that they’d be closing all of their tasting rooms (not including their sixth location at a casino in Arlington, Washington) after Dec. 31 came as a stab to many, including in their hometown.
“It is always a loss when a business leaves our city, but the news that Heritage Distilling Company, Inc will be closing its tasting rooms and retail locations in Washington and Oregon hurts more than most,” Gig Harbor Mayor Mary Barber wrote in a statement Oct. 23.
Heritage co-founder and CEO Justin Stiefel clarified in an email that their location at Angel of the Winds Casino Resort will not be closing. That location is owned by the casino and operated under a license, he wrote.
“The closing of our locations does not impact theirs, and in fact, we are adding more HDC branded tasting rooms in other tribal casinos,” he wrote.
Heritage attributed the decision to close tasting rooms in a press release to challenging state regulations for their industry, taxation and changing consumer behaviors. The release Oct. 23 didn’t cite the company’s cryptocurrency ventures as a reason for closing tasting rooms, but it did give an overview of the company’s cryptocurrency strategy.
“The company became the first Nasdaq-listed company to hold $IP tokens as a primary treasury reserve asset,” the release said. “Through this strategy, IP Strategy offers public market investors broad exposure to the $80 trillion programmable intellectual property economy in a regulated equity format.”
Prior releases suggest that Heritage has been setting its sights on cryptocurrency for some time.
Stiefel declined an interview with The News Tribune, writing via email that the company isn’t at liberty to speak publicly about the cryptocurrency portion of their business at this time. He referred The News Tribune to the company’s previous press releases and public filings to the U.S. Securities and Exchange Commission.
Bitcoin and other forms of cryptocurrency are digital payments that individuals can send and receive, completing transactions that are stored digitally in a public ledger called a blockchain, Investopedia explains. Because cryptocurrencies aren’t backed by any government or central bank, they are subject to wide price swings and are regarded as highly risky investments, according Charles Schwab. The value of these digital currencies is determined by factors like supply and demand and how users perceive its worth.
A move to accept cryptocurrency as payment
Heritage announced Jan. 10 that it would begin accepting bitcoin as a form of payment for products and services, sold directly to customers via its e-commerce platform. The new Bitcoin Treasury Policy would also allow the company to hold bitcoin in its treasury and use it to pay vendors, the press release said.
The company introduced two whiskeys available to customers paying in crypto in June: House of Doge Bourbon and Bitcoin Bourbon.
Press releases indicate that Heritage saw the benefits of cryptocurrency outweighing the risks, in part because the cost to produce their goods is less than the price they sell them for. That creates a “cushion” that other investors who purchase bitcoin with cash don’t have, the company noted in an excerpt of their Bitcoin Treasury Policy Statement.
“The benefits of attracting a new set of buyers, consumers and fans along with the margin cushion the Company can create, coupled with the potential to see bitcoin increase in value, more than offsets the risk of loss if the price of bitcoin were to fall at any one time or over a given period of time,” the statement read.
Tim Leung is the Boeing Endowed Professor in the University of Washington’s Department of Applied Mathematics, and has done extensive research on cryptocurrency. He also directs the department’s Computational Finance and Risk Management Program.
In an interview, Leung said that using cryptocurrency can expose businesses to volatile price swings and potentially impact their ability to pay for regular expenses, such as staff payroll, rent and materials.
“We need to understand that businesses need to pay money, pay for labor, material, space, everything, and often time, they cannot wait,” Leung said. “They have to pay every month, or bi-weekly, or every week ... and when you receive payment in a volatile cryptocurrency, that may not be amenable to that operation.”
Cryptocurrency in Heritage’s treasury
But there’s another piece to the puzzle, Leung said. Heritage has launched a treasury with hundreds of millions of dollars’ worth of $IP, a token that enables users to buy and sell pieces of intellectual property, in partnership with a company called Story.
In an interview with CNBC, Story CEO and Co-Founder SY Lee explained that the appeal of investing in IP tokens is that it offers investors exposure to both a strong asset class — intellectual property — and artificial intelligence infrastructure expected to support intellectual property rights into the future.
Heritage made $IP its primary reserve asset in August, raising money from private investors and partners to create a treasury reserve worth approximately $361 million based on the token’s price on Aug. 10, according to a company press release.
The move marks another way Heritage has branched out into unfamiliar territory. Leung explained that most companies stick to stabler assets like cash or government bonds for their treasuries.
“Imagine you have a treasury holding volatile assets,” Leung said. “That will affect the stability of the business.”
He offered an example: One day, the market might say a company has assets worth $100 million. Another day, the market might say those assets are worth $80 million. That volatility, and the major upfront capital investment in these tokens, could affect a business’s ability to pay for its regular operating expenses.
How can businesses benefit from adopting cryptocurrency?
While he said it isn’t completely clear what specific benefits crypto holds for Heritage, Leung said companies may choose to make such financial decisions because they have a particular vision of what the future will look like.
If someone believes that cryptocurrency will become the mainstream form of payment in the future, they may see the advantage of being a “first mover,” Leung said.
If Heritage’s goal is to eventually hold most of their assets as digital currency, it would also make sense for them to accept crypto as payment for their products, he said. That would eliminate the need for them to exchange crypto for fiat currency like U.S. dollars, which is where the volatility comes from.
He offered another analogy between Heritage and businesses that envision a future driven by AI. Those companies may anticipate having a smaller footprint, fewer employees and automated processes, and choose to lay off employees now to prepare for the future.
His guess is that Heritage is shifting their business model away from offering something that comes with an experience, like a tasting room, and more toward a direct-to-consumer e-commerce model where customers can buy spirits directly using cryptocurrency.
Asked if the distilling company stands out for its recent financial moves, Leung said he thinks they’re “definitely one of the first” to use this strategy with IP tokens. But they could be the first of many, he said.
“Some may look to this, look at whether they are successful and follow suit or not ... it’s too early to tell,” Leung said.
This story was originally published November 10, 2025 at 5:00 AM.
