On Raj Bhakta's 500 acres in Shoreham, pigs roam and whiskey pours freely.
"Ended up combining a great love of whiskey with entrepreneurial gusto as a first generation American," Bhakta said.
Bhakta owns WhistlePig, a rye whiskey company. The company says it's created 20 jobs in the past two years, produced more than $300,000 in sales taxes and more than $840,000 in liquor taxes for Vermont.
"America's finest rye whiskey," Bhakta said.
Bhakta grows rye on his farm to eventually make his own whiskey. Right now, he gets rye whiskey from Canada and is storing around 500 barrels on his property. He bottles it under the WhistlePig label. Bhakta plans to build a distillery this summer. He doesn't expect to ever store more than 30,000 barrels of whiskey on site.
Reporter Gina Bullard: When it comes to WhistlePig, do they need an act 250 permit?
Geoffrey Green/Agency of Natural Resources District 9 Coordinator: Yes, and we notified them two years ago that they needed one.
But WhistlePig never got one. The company never even applied. And the state just realized it after a recent complaint from a neighbor. George Gross lives three-quarters of a mile away. He's fighting WhistlePig, citing concerns over black mold that can be a byproduct of whiskey production. Gross wouldn't talk on camera, but the state is looking into his complaint.
"It's a complicated issue, a scientific issue and they are going to have to take their time to revue the reports and see what, if any issue this black mold may result," Green said.
Bhakta denies there will ever be a health threat, saying it would take triple the amount he's producing to ever pose a risk, and even that's debatable.
"Here are the barrels. I can get you a magnifying glass, but I don't think you'll find any fungus growing," Bhakta said.
Bhakta claims he was confused about the permitting process and therefore didn't apply for Act 250 approval earlier. Bhakta is now reluctantly seeking a permit to expand his business. He says the permitting process is outdated.
Raj Bhakta: Act 250, which was passed decades ago, provides loopholes that were not intended to be used by rich retiree neighbors from New Jersey to shut down family farms.
Gina Bullard: So, you think this is a family farm?
Raj Bhakta: Well, I live here with my family, so this is a family farm.
But the state says he's not considered a farm yet, because he's not using enough of the rye he's growing yet.
His neighbor who complained to the state sells berries and peaches and tells the state he's worried about his business.
Gross writes: "We are concerned that it will be impossible to market our produce, not to mention the impact that mold will have on the health of our plants and trees."
"They're concerned this black mold may affect their livelihood," Green said.
But proving that will take a legal fight. Both sides have brought in experts on black mold. And the state says this is a first.
"Rarely do we get well-known experts flying into Vermont to offer testimony about the effects of black mold," Green said.
The black mold experts that both sides have hired will sound off in a hearing Feb. 22 in front of the Act 250 board. The board will make its decision after that.
It's unclear if WhistlePig will face any penalties for not having an Act 250 permit for two years. The issue has been forwarded to the Vermont Natural Resources board. Officials told me that they prioritize their cases and they haven't even decided if they are going to investigate this case at all, let alone enforce it.