In the wake of prohibition, a jumble of conflicting alcohol distribution laws arose across the country, which to this day makes doing business at times confusing and burdensome. For example, Pennsylvania and Utah monopolize all distribution and retail sales of alcohol within their borders. Michigan only controls distribution, while a total of seventeen states including North Carolina, New Hampshire, and Idaho, exert either partial or complete control over retail sales. In Oklahoma, liquor stores are independently owned, but according to state law, those retailers can’t sell anything but alcoholic beverages—not even a corkscrew or a wine glass. The best state that doesn’t heavily regulate some form of a three-tiered system is Washington DC, which eliminated its state liquor stores in 2011.

As a result, there’s no such thing today as a free market in the alcoholic beverage industry in the United States. Some people say that there needs to be some regulation in the business, and we agree. Alcohol can be too easily abused if there aren’t some limits and controls, and it certainly shouldn’t be accessible to minors. But the complexity of fifty states enforcing fifty different sets of laws hurts everyone in the wine industry—especially the smaller producers. There’s no way a boutique winery that owns, say, three hundred acres of vineyards can sell enough product to afford to complete the requisite paperwork and hire a legal team to navigate the complexities of selling their products in twenty states, let alone fifty. Smaller producers also have trouble getting their wine distributed by the powerful, oligopolistic distributors because their profit margins are relatively thin and the marketing dollars to support their brands just aren’t there.

These days, boutique wineries might decide to sell directly to consumers, which is legal in some—but not all—states. Such a setup requires a lot of legwork on the part of the producers, to make sure their products are being placed in the right restaurants and in the cellars of influential or wealthy people to create a buzz and have others say, “Ooh, I’ve never had that wine; I’d like to get a bottle of it.” But in the process of doing this work, the producers need to hire people to make their wine, tend to the vines, perform the administrative duties, and manage sales. It can take more than ten years for a boutique to begin to turn a profit this way. Whether you own a winery, distribution company, or retail outlet, it is a minimum of five to seven years to achieve profitability. The reason for this derives from the various hands that wine must pass through as a result of the three-tier system.

As states slowly update their laws to take down some of the roadblocks to the sale of alcoholic beverages—in a nod to the growing trend of boutique wineries and craft- breweries—the direct-to-consumer model is getting more popular, despite the legal barriers. In the wine industry in the United States, direct-to-consumer sales accounted for more than $3.5 billion in revenue last year, or roughly 10 percent of all domestic wine sales.