When distiller Geoff Dillon wants to experiment with new recipes, boxes of pears and plums arrive at his Beamsville distillery from neighbouring fields. When his father, Peter Dillon, wants to increase his selection of cocktail bitters, he scrapes bark from a walnut tree from a nearby winery.

Home-grown distilling like this hasn’t existed in Ontario since the 19th-century heyday of Gooderham & Worts. But Dillon’s Small Batch Distillers, which opened in late 2012, making gin, vodka, rye whisky and bitters using local ingredients, is banking on a small-batch revolution in the spirits industry. Particularly when it comes to rye.

“Canadians don’t make rye whiskies anymore. They’re all blends,” says Geoff Dillon. “If you want to buy the real thing, you get something like Sazerac from the States.” Last year, Dillon barrelled his first 100% rye grain whisky. But three years—the legal cask-aging requirement for Canadian rye—is a long time to wait for a product in whisky-thirsty Ontario, which has seen a 264% increase in sales over the past decade. How do you make money in the meantime?

Forget the barrel. Dillon’s released The White Rye, an unaged whisky in April ($37.45 at LCBO stores), and it’s a very different experience from the sweet spirit Canadians know: spicy, with a heady tequila or grappa nose, the ersatz moonshine can be enjoyed neat, but it adds a wild element to an old-fashioned. In May, it took home a gold medal for unaged whisky at this year’s San Francisco World Spirits Competition.

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In addition to unaged rye, Dillon’s current product roster includes a gin, a vodka and a series of cocktail bitters based on local ingredients. The latter may prove a deft move as a growing number of home bartenders seek alternatives to Angostura. Dillon’s sells six varieties, including pear, lime and cranberry bitters. “We’re doing unique gins, so we wanted to offer other experiments,” says Dillon.

The ranks of craft distillers are growing in Ontario, but success won’t come easy. The province has some of the strictest distilling regulations in North America, many of them harkening to Prohibition days. To open a retail store, for instance, a distillery must have a 5,000-litre pot still, 10 times the size used by craft producers. Dillon’s circumvented this by converting a 5,000-litre mash tun—a vessel used to ferment grain—into a hybrid tun with a compartmentalized still. Then there are the challenges of selling through a closed system like the LCBO, where wine and craft-beer producers enjoy higher profit margins than distilled beverages. Along with craft distillers like Concord, Ont.’s Still Waters and Prince Edward county’s 66 Gilead, Dillon’s is calling on the government to even the playing field.

Every distillery has its story, and this is the one Dillon’s hopes to share some day: how it helped change provincial laws, build an industry reliant on local products, and managed to have fun doing it.

When Craft distillers go quirky

Parsnip gin, the Subversives Distillers (Que.) Their Piger Henricus gin starts with juniper and coriander, then veers off into peppery root veg $30, distillateurssubversifs.com

Pine vodka, 66 Gilead Distillery (Ont.) Crisp and clean like vodka should be, but with a hit of citrusy Canadian pine $39, 66gileaddistillery.com

Single-malt vodka, Still Waters Distillery (Ont.) By using 100% malted barley instead of grain, the vodka gets a sweeter, creamier profile $35, stillwatersdistillery.com