The Perfect Market Opportunity -- If Only It Was Legal

Last Updated May 9, 2011 1:51 PM EDT

By Joseph Conway
Corporate attorney Jared Gurfein and two business partners founded Viridian Spirits to reintroduce absinthe in the U.S. in 2006. Based in Manhasset, New York, the company brings in nearly $10 million in annual revenue.

The problem
Early in 2006, Gurfein had a chance conversation with Jonathan Bonchick, a friend whose family was in the spirits industry. Bonchick was looking to create a new boutique brand.

At some point in the previous weeks, absinthe had come up on Gurfein's radar. The eerie green Victorian-era spirit derived from a combination of herbs showed up in the film Moulin Rouge in 2001 and had been trickling into pop culture ever since.

Absinthe represented an opportunity to seize a niche market on the ground floor. The beverage had been illegal in the states since the early 1900s and its contraband status had only enhanced its mystique. If he could somehow reverse the ban, Gurfein was sure that profits would follow.

The background
"[Absinthe] has a long history as being one of the most popular beverages on earth, until it was demonized buy the wine industry," explains Gurfein. After European vineyards were decimated by an insect infestation in the mid-19th century, the wine industry created the myth that absinthe contained addictive psychoactive drugs in order to regain lost market share. By 1915, the U.S. and most of Europe had outlawed the drink.

The two friends agreed to research within their respective areas of expertise -- Bonchick on absinthe's market potential and Gurfein on its complicated legal status. They took on a third partner, Eddie Soleymani, and formed Viridian Spirits, LLC.

Most importantly, they also recruited Ted Breaux, a New Orleans native of French descent and Harvard-educated chemist. Breaux had already made a hobby of studying absinthe for more than 13 years, buying heirloom bottles at estate sales and reverse-engineering the spirits inside to determine its individual chemical components.

"Ted's research proved that none of the crazy things that were ever attributed to absinthe could ever have been true," says Gurfein. Still, everyone kept their day jobs, knowing that they were potentially about to enter into a long, drawn-out battle over popular perception.

The solution
With Breaux's guidance, Viridian developed a traditional absinthe made exactly as it was 100 years ago. When they submitted the formula to the Alcohol and Tobacco Tax and Trade Bureau (TTB), it received immediate approval. "Then we put the label together that said 'absinthe' on it," said Gurfein, "and that's when we had to start struggling with the government."

He hired a regulatory lawyer to open doors and make introductions at the federal level, and for the next year went back and forth with the government. Gurfein found himself giving federal regulators history and science lessons, and in the end, all of Breaux's research checked out: One controversial chemical, thujone, was present, but only in trace amounts deemed permissible by government standards.

Getting the ban on absinthe reversed was less harrowing than it might seem. Gurfein is quick to credit the TTB for its neutrality and open-mindedness. "It's one of the few divisions of the government that actually does like to help the little guys," he says.

The aftermath
With the legal hurdles out of the way, Viridian's Lucid became the first absinthe to hit American shelves. In 2008 the company did almost $10 million in sales. Business slowed considerably due to the global financial meltdown, but their earnings projections put them back at the $10 million mark again for 2011.

One final legal challenge awaits Gurfein. "In the United States, we have laws about what a gin, bourbon or scotch can be, but there's no class and type for absinthe," warns Gurfein. So while you won't experience mind-altering effects if you imbibe the "green fairy," you should still choose wisely. Until a legal definition is adopted, you might just end up drinking high proof spirits with a little food coloring.