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How to Start a Winery in Napa or Sonoma: Paths, Permits and Costs

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Starting a winery in Napa or Sonoma takes three separate approvals: federal qualification from the Alcohol and Tobacco Tax and Trade Bureau (TTB) as a bonded winery with a basic permit, a Type 02 winegrower license from California’s Department of Alcoholic Beverage Control (ABC), and, if you build or operate your own facility, a county use permit. Most new labels don’t start with a building. They begin by having wine made under custom crush, or by becoming an alternating proprietor inside an existing winery, and add land and a permitted facility later.

The order you choose decides your first costs, how fast you can sell wine, and what property you need. This guide maps the four common paths in the North Coast, what each requires, the county rules that make a winery building the slowest piece, and what to check if you plan to buy land for a future winery. It sits within our vineyard and winery guides.

Four ways to start, from lightest to heaviest

Path	What you own or control	Federal (TTB)	State (ABC)	County land use
1. Custom crush brand	A brand and, often, fruit; a host winery makes the wine to order	The host is the producer; a customer that sells the wine to other dealers qualifies as a wholesaler under 27 CFR part 1 and keeps part 31 records	A license that fits your sales plan; confirm the type with ABC	None for production; the host’s permit covers its building
2. Alternating proprietor	Your own bonded winery operating in a host’s space on a TTB-approved schedule	Full bonded winery registration and basic permit in your name	Type 02 winegrower license for your entity	Host’s use permit; no permit of your own for the building
3. Lease or buy an existing permitted winery	A building with an existing use permit	New qualification for your business; permits can’t be bought with the building	Type 02 for your entity, or an ABC-approved license transfer	Operate within the existing permit; changes need county approval
4. Build your own winery	Land, building, equipment and permits	Bonded winery registration and basic permit for the new premises	Type 02 at the new premises	A new use permit, with environmental review, water and wastewater approvals

Paths 1 and 2 are explained in detail in our guide to custom crush and alternating proprietorships. Path 3 is a real estate and license transaction; see winery license transfers and our comparison of buying a winery business versus the real estate.

Step one: federal qualification with TTB

TTB says every company must file an application and receive permission before it commercially produces wine, stores, blends or bottles untaxpaid wine, or wholesales or imports it. For a producing winery, its federal application page lists:

The Application to Establish and Operate Wine Premises (TTB F 5120.25).
The Application for Basic Permit under the Federal Alcohol Administration Act (TTB F 5100.24), required for anyone producing or blending wine for commercial purposes.
A wine bond (TTB F 5120.36), unless the proprietor is exempt under 27 CFR 24.146(d), which covers proprietors paying tax on a deferred basis who qualify for annual or quarterly tax return periods. Under 27 CFR 24.271, quarterly returns are available to a winery that owed no more than $50,000 in wine excise tax in the prior calendar year and expects the same this year. If tax due during the year passes $50,000, quarterly eligibility, and the bond exemption with it, ends for the rest of that year.
Special Tax Registration (TTB F 5630.5), with no tax due.
Signing authority, trade name registrations, organizational documents and any lease.
A premises diagram, required for alternating proprietor hosts and tenants and, TTB says, “quite helpful” for everyone else.

TTB must find that the premises protect the revenue and suit the planned operations, and that the company’s principals aren’t barred from holding a basic permit. A paper application may take as many as seven business days just to be entered into TTB’s tracking system; a specialist then reviews it and may send it for an on-site inspection. Filing through TTB’s Permits Online system is the other route.

Labels

Before bottled wine is sold, its label needs a Certificate of Label Approval (COLA). TTB’s Industry Circular 2008-4 says each proprietor that bottles obtains its own COLAs, while custom crush customers don’t; the producing winery does. Label terms tied to place, such as an appellation or “estate bottled,” carry their own rules; see our guides to the Napa Valley appellation and Sonoma wine appellations.

Step two: the California Type 02 winegrower license

ABC’s Type 02 license authorizes the production and sale of wine by wineries. ABC says a winegrower must have facilities and equipment for converting fruit into wine and must actually produce wine. It also notes that federal rules let one winegrower use another winegrower’s facilities, which is the alternating proprietorship route, and that separate winegrower licenses go to each legal entity making wine under its own bonded winery.

Sequence. Because the state license follows the federal bonded winery, plan the TTB application first and the ABC application right behind it.
Server training. ABC lists the Type 02 as subject to Responsible Beverage Service requirements, so servers and managers at tastings need RBS certification.
Add-on permits. ABC lists separate permits that reference winegrowers, such as sales at farmers’ markets and events and estate tasting events. Check which you’ll need for your sales plan.

Step three: county permits for a winery building

The building is where Napa and Sonoma differ most, and it’s usually the longest part of the timeline. A winery is a land use that counties regulate parcel by parcel.

Napa County

Napa County’s Winery Definition Ordinance (WDO), Ordinance No. 947 of January 23, 1990, sets the basic rules. As the 2014-15 Napa County Grand Jury summarized them, a new winery needs a use permit and a parcel of at least 10 acres; wineries new or expanded after January 23, 1990 must source at least 75% of their grapes from Napa County; and accessory structures can’t exceed 40% of the area used for wine production. Some small wineries on smaller parcels operate under a certificate of exemption, and expanding one requires full WDO compliance.

The same report said use permit reviews often take 9 to 12 months or more, at the applicant’s cost, with the Planning Commission deciding and appeals going to the Board of Supervisors. Over the seven years ending in 2013, the county averaged about 18 winery use permits a year, roughly eight new wineries and ten expansions. Our guides to the Winery Definition Ordinance and the Napa winery use permit process go further.

Sonoma County

In unincorporated Sonoma County, a winery and its events need a discretionary use permit from Permit Sonoma, which can require site studies on water, noise, traffic and biological and cultural resources. Permit Sonoma bills the project at cost from a trust account, sends a completeness letter within 30 days, prepares an environmental document under CEQA, circulates it for public comment with notice to owners within 300 feet, and then holds a hearing before the Board of Zoning Adjustments, with a 10-day appeal period to the Board of Supervisors. Once approved, the applicant generally has 24 months to meet the conditions before the permit vests.

On March 14, 2023 the Board of Supervisors approved the county’s first Winery Events Ordinance, which applies to new and modified use permits for visitor-serving uses outside the Coastal Zone. Among other standards, it limits tasting rooms to 10 a.m. to 5 p.m. and requires a traffic management plan for events over 100 participants; existing permits aren’t affected. See our guide to Sonoma County winery use permits.

In both counties, a winery’s water supply and process wastewater are separate design problems, often the most expensive ones; see our guide to winery wastewater.

What drives the cost of starting a winery

Published cost figures rarely match a specific plan, so build your budget from quotes. These are the lines that move it most.

Fruit. Your own vineyard or grape contracts; in the North Coast, fruit is often the largest annual cost. Our guide to grape purchase agreements covers contract terms.
Production. Custom crush fees, or rent and equipment time as an alternating proprietor, or the capital cost of your own building and equipment.
Permits and studies. For your own winery: planning applications, environmental review, traffic, water, wastewater and fire access studies, and the consultants who prepare them.
Compliance. Bond (unless exempt), excise tax returns, TTB production reports, label approvals and ABC licensing.
Inventory time. Wine spends months, sometimes years, in tank, barrel and bottle before release, so cash goes out well before sales come in.
Insurance. Product, property and liability cover, priced before you commit to a facility.

A practical sequence

Write the business plan around the path. Volume, price point, sales channels and timing decide whether custom crush, an alternating proprietorship or your own winery fits.
Secure fruit. Sign grape contracts or confirm your own vineyard’s yield.
Choose a facility. Compare custom crush and host wineries; read the host agreement and confirm the host’s own permit allows the work.
File with TTB for a bonded winery and basic permit if you’ll be a proprietor, well before harvest.
Apply to ABC for the Type 02 or the license your sales plan needs.
Get label approvals before bottling.
Plan the long game. If an estate winery is the goal, start the land search early, because the property, not the paperwork, sets the ceiling on what you can build.

Buying land for a future winery

A parcel can be ideal for growing grapes and still be a poor winery site. Before you buy with a winery in mind, check:

Zoning and parcel size under the county’s current rules, and whether a use permit has ever been applied for on the parcel.
Water for production and domestic use, and the groundwater rules for the basin; see vineyard water rights.
Wastewater capacity and soil suitability for process water disposal.
Road access for trucks and fire apparatus, and any shared road agreements.
Williamson Act contracts or easements that limit non-farm uses.

If your first vintages will be made off site, a vineyard parcel without winery potential may be the better value. Our guide to buying a vineyard in Napa or Sonoma and the winery due diligence checklist cover the property side.

Questions people ask

Can I start a winery without a vineyard?

Yes. Many labels buy fruit under grape contracts and have it made under custom crush or as an alternating proprietor in someone else’s winery. TTB doesn’t require a proprietor to own vineyards, though it considers investment in vineyards and other permanent assets when it reviews an alternating proprietor’s application.

Can I start a winery without building one?

Yes. As an alternating proprietor you’re a bonded winery operating in a host’s facility, and ABC notes that federal rules allow it. Under custom crush, the host winery is the producer and you’re its customer.

What licenses does a California winery need?

For a producing winery: TTB qualification as a bonded winery with a basic permit, ABC’s Type 02 winegrower license, label approvals before bottled wine is sold, and county land-use approval for any winery building or tasting room you operate.

Do I need a bond to start a winery?

Generally a wine bond on TTB F 5120.36 is required, but 27 CFR 24.146(d) exempts proprietors paying tax on a deferred basis for any part of the year in which they qualify for annual ($1,000 or less in tax) or quarterly ($50,000 or less) return periods. Ask your compliance adviser which applies to your projected volume.

How long does it take to get a winery license?

There’s no fixed answer. TTB says a paper application can take up to seven business days just to be logged, before review and any inspection, and ABC’s review follows. A new winery building adds a county use permit; Napa County’s grand jury reported in 2015 that those reviews often take 9 to 12 months or more.

Can I hold tastings at my vineyard?

Only as the county permits for that parcel. Tasting rooms and events are land uses with their own rules in each county; our Napa and Sonoma permit guides explain them.

Is buying an existing winery faster than building one?

Often, because the use permit already exists. But federal permits can’t be sold with the property, the state license needs ABC approval to transfer, and you inherit the permit’s limits, so read it before you price the deal.

If your plan includes buying vineyard or winery property now or later, we can help you match the land to the path you choose. Talk with Diamond about your winery plans.

This is general information, not legal or tax advice; talk to an alcohol-beverage attorney, land-use attorney or winery compliance adviser about your situation.

Sources & notes

Last reviewed October 2026 by Matthew Martinez.