Another small business in California is closing its doors for good.
Brewery Draconum, a family-run brewpub that has been part of Old Town Newhall for almost ten years, will shut down after September 28. This is another significant loss for the Santa Clarita community.
They’ve put in a lot of effort. But, unfortunately, the math just doesn’t add up anymore.
And, in California, that math can be tough. Independent restaurants and breweries are dealing with rising costs for labor, rent, utilities, insurance, and supplies, which is quite challenging.
The state has some of the highest minimum wage and labor standards in the nation—these can hit labor-intensive businesses like breweries particularly hard, as industry experts have pointed out.
When you factor in high commercial rents and utility expenses in Southern California, as well as state licensing fees and various compliance costs, it’s no wonder small operators feel stretched thin.
Brewery Draconum is not just another corporation leaving the state. It’s a small, independent, family-owned establishment with just one location.
There aren’t any other branches or franchises to step in when they close. Once the doors shut on September 28, that will be it for Brewery Draconum.
Also, the general tax situation doesn’t exactly invite new business. California, New Jersey, and New York rank as the three least favorable states on the Tax Foundation’s State Tax Competitiveness Index.
Their low rankings stem from complicated income tax systems, high corporate tax rates, and hefty payroll taxes.
Brewery Draconum did not explicitly blame any state officials or policies in their announcement.
Nonetheless, their mention of overwhelming costs and an economic landscape that has become “impossible” echoes a common sentiment among small businesses facing a tough operational climate in the state.
And the timing is particularly unfortunate for Old Town Newhall.
Just weeks ahead of Brewery Draconum’s shutdown, the Newhall Refinery—another local favorite that had been in the community for 13 years—was destroyed by a fire on August 24.
Several neighboring businesses were also affected by the blaze.
By the end of the month, Old Town Newhall will have lost two longstanding Main Street establishments in just a matter of weeks.
