Microbreweries are flourishing in Texas. But now the state is demanding these entrepreneurs hand over millions of dollars in property rights to politically connected beer distributors—and they can’t receive a single cent.

Distributors used to compensate brewers for the right to sell their beer in markets like Houston or Austin. But thanks to a sales restriction passed in 2013, brewers can no longer “accept payment in exchange for an agreement setting forth territorial rights.” So under the new law, brewers are forced to give up their distribution rights to distributors for free. Even worse, distributors can then sell those rights to other distributors and pocket the money.

In other words, Texas made it illegal for craft brewers to profit from their own beer. As long as this law stands, microbreweries will find it incredibly difficult to expand their business to other parts of the state.

The law was passed over the objections of Texas brewers. Only one group supported it: distributors, who clearly stood to gain from its passage. The law’s impact was immediately understood by both brewers and distributors. Dallas-based brewer Michael Peticolas had been negotiating with distributors for territorial rights at the time the law was passed. After it passed, those negotiations abruptly ended.