Blue Spirits Distilling, a Washington-based distillery recognized for its award-winning flavored vodkas and other spirits, has ceased operations after filing for Chapter 7 bankruptcy on June 11. The filing in the Eastern District of Washington initiates a process of liquidation, meaning a court-appointed trustee will sell off all company assets.
The distillery, which operated a manufacturing facility in Cashmere and a tasting room in Leavenworth, was known for its cult-favorite pickle and espresso flavored vodkas. Blue Spirits also produced gin, whiskey, rum, and tequila, as well as a proprietary Tommy Bahama line of distilled spirits.
Despite receiving accolades, including gold medals at the 2025 New Orleans Spirits Competition for its pickle and espresso vodkas, the company faced financial challenges. Court records indicate that in 2022, Blue Spirits received a temporary rent deferral on its Port-owned property in Cashmere. At the time, the company cited financial difficulties and indicated it had invested approximately $590,000 in property improvements, including upgrades to restrooms and the HVAC system. Dwindling distribution business was also cited as a factor contributing to financial hardship.
A Chapter 7 bankruptcy filing contrasts with a Chapter 11 filing, which allows a business to reorganize and attempt to continue operating. With Chapter 7, the company's assets will be sold off to satisfy creditors, marking the end of Blue Spirits Distilling's operations.