Quick Take

Santa Cruz's Venus Spirits is among a coalition of California craft distillers urging state legislators to make permanent their ability to ship directly to consumers, Jessica M. Pasko reports in her weekly look at local business.

Each week, we’re taking a closer look at the movers and shakers, the growth of industries, and what’s really driving the Santa Cruz County economy. I’ll be spotlighting some of the biggest areas for opportunity, updates on local development and all things underpinning the regional business scene each Wednesday.

Got ideas? Send them my way to news@lookoutlocal.com with “Business News” in the subject line.

Direct shipping was a lifeline for California distilleries during the pandemic; now they’re fighting to save it

With California distillers facing the prospect of no longer being able to ship directly to consumers, Santa Cruz-based Venus Spirits is part of a coalition of craft distillers urging the state legislature to make the option permanent. 

Before March 2020, craft distillers weren’t allowed to ship spirits like vodka and whiskey to customers directly, a holdover from Prohibition-era laws. However, with tasting rooms closed for months amid the COVID-19 pandemic, state leaders temporarily allowed distillers to ship to customers, and for many, that kept their business afloat. The temporary allowance was extended multiple times, but it stands to expire at the end of this year.

The relaxation of rules helped Venus Spirits keep providing products to existing customers in and outside Santa Cruz County and reach new ones. Without a permanent law in place, they could lose that ability come January 2026. Now, Venus and his colleagues are asking state Sen. John Laird to introduce legislation for permanent authorization. 

Venus Spirits Aquavit 02
Venus Spirits is the only distiller in California making aquavit, an herb-infused Nordic spirit often enjoyed at celebrations.

“We have been pushing to change this,” said Sean Venus, Venus Spirits’ co-owner. “Sen. Laird has been helpful, and we’re trying to persuade him to draft this legislation.”

The alternative to direct-to-consumer shipping requires working with a distributor, and for smaller distillers like Venus Spirits, that can be a challenge. Some distributors are dropping small distilleries from their roster, and the added middleman can be cost-prohibitive for smaller businesses. (Under what’s known as the three-tier system in California, a distillery sells its products to a distributor, which then sells them to restaurants and retailers, which then sell them directly to customers.)  A small distillery would have to sell four bottles through distribution to make the same profit as selling just one bottle directly to the customer, according to Venus Spirits, which is urging its customers to contact Laird’s office to ask him to draft permanent legislation. New York Gov. Kathy Hochul enacted a similar law in New York last summer, and other states such as Kentucky are actively working on their own regulations. 

The lack of permanent legislation in California keeps the state’s distillers from being competitive as other states enable direct shipping, which is quickly becoming an integral part of the distillery business, according to Venus.

“We’re kind of in the middle ages here in California,” said Venus. 

In a response this week, Laird said a host of challenges would likely make it difficult to build political support for such a bill. Read more on that here.

Former Dignity Health CEO and RTC commissioner dies

Dr. Robert Quinn. Credit: Santa Cruz County Regional Transportation Commission

Dr. Robert Quinn, former CEO of Dignity Health Medical Foundation, died on Dec. 22. No cause of death has been made public. Quinn, 63, had served as CEO for four years and was a doctor at Dominican Hospital in Santa Cruz before that. He’d also been an alternate on the Santa Cruz County Regional Transportation Commission for the past three years.  

Quinn stepped down from his role at Dignity Health in November and was recently named president of Mountain View-based El Camino Health Medical Network. Following Quinn’s departure, Dignity Health’s vice president and chief financial officer, Theresa Hylen, has served as interim leader, and a national search for his replacement is underway. 

“We are deeply saddened by the passing of Dr. Robert Quinn, who was a remarkable physician whose kindness, dedication and compassion touched countless lives,” said Julie J. Sprengel, president and chief executive officer for CommonSpirit Health’s California region. “For 29 years, he worked tirelessly to support our mission, leaving a lasting legacy on the communities we serve.”(CommonSpirit is the parent company of Dignity Health.)

Local fintech company Paystand to open new downtown Santa Cruz headquarters

Payments technology company Paystand is moving its headquarters from Scotts Valley to downtown Santa Cruz. Next week, the company will host a grand opening of its new office in the Rittenhouse Building at the corner of Pacific Avenue and Church Street. 

Paystand CEO Jeremy Almond (left) and chief of staff Alexandra Navarro at the company’s Scotts Valley headquarters. Credit: Kevin Painchaud / Lookout Santa Cruz

Paystand, founded in 2014, provides technology that helps companies do things like pay vendors directly without having to mail them a physical check or automate payments for recurring bills. The company employs more than 300 people at seven offices across the United States and in Mexico. 

ICYMI: With impending closure of O’Neill’s Surf Shop, downtown Santa Cruz loses another flagship store on Pacific Avenue

O’Neill Surf Shop will close its Pacific Avenue location next week, leaving yet another retail vacancy in downtown Santa Cruz.

As Hillary Ojeda reported, the store’s other locations in the county, including the two Capitola stores and the one at the Santa Cruz Beach Boardwalk, will remain open. The closure, effective Jan. 14, comes after 25 years of operation there. Company officials said the closure is part of efforts to consolidate operations “amid an evolving retail landscape.”

The store’s closure follows the announcement that Forever 21 would depart its downtown store at the end of this month and it comes after New Leaf Community Markets closed its Pacific Avenue store in advance of opening a new, larger store in the former Ross Dress for Less on River Street. Meanwhile,  local real estate agents continue working to fill a number of other downtown vacancies, including the former Logos Books & Records and several new retail spaces created as part of new mixed-use developments. 

Ch-ch-changes: Openings, closings and other developments

  • Bay Federal Credit Union announces new hires and promotions: Bay Federal Credit Union has promoted Michael Atkinson to assistant vice president. Atkinson has worked for the credit union since 2002 and most recently served as digital marketing manager. Additionally, Bay Federal named Creedence Shaw the new vice president of business services and promoted three people to branch management roles. Rachael Campos is the new assistant vice president and branch manager of the Aptos branch, Adrian Vargas will be assistant vice president and branch manager of the River Street branch in Santa Cruz and Maribel Maldonado is now assistant vice president and branch manager of the Salinas branch
  • Hidden Fortress Coffee closing Watsonville cafe: Hidden Fortress Coffee Roasting is closing its cafe on Hangar Way in Watsonville after Jan. 18. The cafe opened in 2016; at the time, it was the first roastery cafe in Watsonville. In a letter to customers, owner Amelia Loftus cited financial reasons and said the location had lost money for four consecutive years. Hidden Fortress is a regular vendor at several local farmers markets, runs a mobile business and operates a cafe in the Cruzio building in downtown Santa Cruz. Those locations will continue, said Loftus, but the business will need to find a new roasting space and kitchen after the Watsonville cafe closes. 
  • Soquel Creek Water District hires former Santa Cruz mayor: David Terrazas is the human resources director at the Soquel Creek Water District starting this week. Terrazas previously served as a city councilmember and mayor for the city of Santa Cruz from 2010-18. He has extensive experience in human resources, organizational development and public policy, and is a longtime attorney. He replaces Traci Hart, who retired in December.
  • County fair CEO resigns amid health concerns: Zeke Fraser, who took the reins as CEO of the Santa Cruz County Fair in 2023, is stepping down next month. Fraser announced last week that he would resign as of Feb. 2 for health reasons. As Wallace Baine reported, Fraser took the position after a period of turnover that followed the abrupt firing of longtime CEO Dave Kegebein in the fall of 2022.
  • Capitola mayor resigns to serve as United Way CEO:  Yvette Brooks is stepping down from her role as mayor of Capitola to take the head job at the United Way of Santa Cruz County. Brooks, who returned to the mayor seat at the end of 2024, replaces Keisha Browder. Browder left the organization in the fall to become CEO of United Way Bay Area.
  • Regional Transportation Committee seeks representatives for independent oversight committee: Residents from county supervisory Districts 1, 3 and 5 are invited to apply for the Measure D Taxpayer Oversight Committee, which reviews how the funds generated by the transportation tax are spent. Applications, due Feb. 7, are here. Members must be county residents and can’t be elected government officials or employees of any agency or organization that oversees or implements projects funded by Measure D sales tax proceeds. 

Got hires, promotions or departures to report? Send them to news@lookoutlocal.com with the subject line “Career changes.”

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Save the date

  • Wednesday, Jan. 15: Santa Cruz Works has rescheduled its eighth annual Titans Awards ceremony, celebrating individuals who have significantly contributed to Santa Cruz, Monterey or San Benito counties through their innovation, leadership and dedication to making a positive impact. The ceremony is at Kuumbwa Jazz, 320-2 Cedar St., Santa Cruz. Tickets and details here.
  • Thursday, Jan. 16: Business leaders are invited to learn more about how fostering LGBTQ+ inclusive workplaces can drive profits and loyalty. Speakers include workplace inclusion expert Sharon Papo and Dusty Colyer-Worth, equity and tourism expert and outreach manager for the Diversity Center. The event takes place from 9 to 11 a.m. at the Hotel Paradox on Ocean Street in Santa Cruz. Register here.
  • Thursday, Jan. 23: The Santa Cruz County Chamber of Commerce hosts its first business after-hours event of 2024 at the Marriott Courtyard hotel at 313 Riverside Ave. in Santa Cruz. Details and registration for the event, which runs from 5 to 7 p.m., are here.

Add your business or networking events to Lookout’s free public calendar, BOLO. Click here to add your event.

Business news worth reading

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FOR THE RECORD: This column was updated with a response from Sen. John Laird.

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Jessica M. Pasko has been writing professionally for almost two decades. She cut her teeth in journalism as a reporter for the Associated Press in her native Albany, New York, where she covered everything...