In 1795, one document, signed in the name of the Spanish king, legalized something that had existed without it for decades. This is the story of how a bureaucratic paper turned a regional trade into the foundation of an industry, and how a drink that would still be called “mezcal wine” for another two centuries began its journey toward the word “tequila.”
Long before any royal seals, agave was already burning in earthen ovens. In 1541, during the Mixtón War, Francisco de Sandoval Acacitli compiled his “Report of a Journey,” describing how Indigenous people prepared agave hearts—mezcal—in barbacoa pits. This was not yet a distillate; it was the roasted core of the plant, sweet, fibrous, nourishing. But from roasted agave to its fermented juice was only one step, and from fermented juice to distillation another—and both had been taken before anyone in Madrid thought to regulate them.
In 1621, Domingo Lázaro de Arregui left behind a description that reads almost like a process chart: the fermented juice of roasted mezcal was distilled, and the product came out “clearer than water.” Later, researchers would calculate that such purity was impossible without double distillation. Double distillation is already a craft—one requiring equipment, skill, and a steady supply of raw material. Someone grew the agave; someone cut and roasted the piñas; someone watched over the fermentation in tepetate pits or leather vessels; someone operated the still. The production chain had taken shape decades before the colonial administration decided it could be taxed. I like that detail—“clearer than water”: you can hear the craftsman’s pride in it, though de Arregui passed it on without meaning to.
The process looked like this: agave hearts were roasted in underground, stone-lined pits—essentially slow ovens where the heat held for days. The softened mass was then crushed with a stone mill—the tahona, usually turned by a mule or horse. The resulting juice ran into pits lined with tepetate—volcanic tuff—or into leather sacks, where it fermented. After fermentation came double distillation. Every stage required knowledge, patience, and resources, while the whole system lay scattered across the slopes and valleys of Nueva Galicia, where agave grew generously and stubbornly.
The Spanish Crown found itself trapped in a system of its own making. On one side was the trade in wine and brandy from the metropole: Andalusia, Castile, Jerez supplied alcohol to the colonies, and Madrid guarded that market as jealously as any other source of revenue. On the other were thousands of leagues between Cádiz and Guadalajara, mountain roads along which barrels of Spanish wine traveled for months, and a local population that had long learned to make its own strong drink from what grew underfoot.
To portray this regime as an unbroken total ban is to reduce the picture to caricature. Reality was more complicated—and elegant in its own way. The Crown maneuvered: it prohibited, then permitted under supervision, then restricted again, then found a way to extract money from production. Its chief instruments were estancos—monopoly retail outlets where vino mezcal was sold under supervision—and asientos, concession contracts granting specific people the right to trade in exchange for fixed payments to the treasury. Put crudely, the Crown could not destroy agave distilling, but it could try to feed it into its fiscal machine.
One of the most revealing episodes came in 1673, when the queen regent Doña Mariana of Austria ordered the mezcal-wine estanco in Guadalajara reopened. The very idea of paying for city water with agave hooch had arisen earlier: the estanco was created in 1637 specifically to finance the waterworks. From then on, the drink that theoretically competed with Spanish imports once again became a source of money for urban infrastructure. This was not generosity or liberalism; it was imperial bookkeeping, counting every real and understanding that a dead market pays no taxes.
Nearly a century later, on May 14, 1768, the viceroy of New Spain, the Marquis de Croix (Carlos Francisco de Croix, uncle of Teodoro de Croix of the 1780 episode), acting on royal orders, with a report from visitador José de Gálvez and a legal opinion from Eusebio Ventura Beleña, established Nueva Galicia’s special status: here, mezcal wine remained legal—and from then on anyone could make it, not only Indigenous craftsmen—and all this production was taxed under the Derecho de Cribas, four reals for each fermentation vessel. Notice the unit of taxation: not per liter of finished product, not per barrel, but per vessel in which fermentation took place. The fiscal apparatus controlled the process at the production stage, not at the point of sale. Meanwhile, in the rest of New Spain, the drink was formally prohibited—and in 1780 Teodoro de Croix even tried to impose the estanco in the northern Interior Provinces. Nueva Galicia lived by its own rules—partly because agave mattered too much there, and control from Mexico City was too far away.
Before José María Guadalupe de Cuervo received his famous license, the family was already woven into the agave landscape of Santiago de Tequila. His predecessor, José Antonio de Cuervo, received a land grant—and agave grew on those lands. In the colonial economy, land was not merely property; it was the legal foundation of any economic activity. Without land—no plantations, no ovens, no stills. The Cuervo family possessed the key resource long before a paper from Madrid confirmed their right to distill.
Santiago de Tequila was a small settlement in the kingdom of Nueva Galicia, part of the Viceroyalty of New Spain. Volcanic soil, altitude, climate—everything here suited blue agave as the Douro Valley suits tempranillo. A family that owned land here and grew agave was already a producer de facto. The only question was whether it would become one de jure.
What surprises me is how little we know about the daily life of those early distilleries. The documents record taxes, licenses, prohibitions—the bureaucratic skeleton. But the tahonas themselves, the pits of fermenting juice, the copper stills, the smell of roasted agave that, they say, carries for miles—all of that remains outside the archives. We know the mechanism, but not the faces of the people who turned the millstones.
In 1795, Charles IV—through the colonial administration—issued José Guadalupe Cuervo a license to produce mezcal wine. In the documents of the period, that was exactly what the drink was called: vino de mezcal or mezcal de Tequila—after its place of production. The word “tequila” as an independent name for the drink, as a legally protected category, would emerge much later, in independent Mexico, and would only be firmly established in the 20th century.
What did the license mean in practice? The right to produce legally, sell legally, and pay taxes legally. It sounds mundane, but for a family business the difference was enormous. Legal status meant the ability to expand: to buy more agave, build new ovens, hire workers, enter contracts with merchants, transport the product along the roads of Nueva Galicia without the risk of confiscation. The producer no longer depended on the mood of a local official and entered a system that, for all its lumbering weight, offered predictability.
The license did not make Cuervo a monopolist. It did not mean all other producers were illegal—the system of estancos and asientos operated both before and after it. But it gave one particular family, on particular land, in a particular place, a legal foundation for a business that could be handed down from generation to generation. In a sense, it was a company’s birth certificate—not for the drink, but for the enterprise itself.
It is important not to surrender to the myth of tequila’s “invention” in 1795. The drink had existed long before that. It was distilled, sold, drunk, taxed, banned, and permitted again. Cuervo’s license marks the moment when one specific producer received stable legal status within the colonial system. The difference between “making” and “having the right to make” is the difference between a trade and a business.
A crust of legends has formed around tequila’s early history, and some of them deserve careful dismantling. One of the most persistent is the myth of Marquis Pedro Sánchez de Tagle (or Altamira) as the “founder of tequila” in 1600. It is a beautiful story, but it is not documented in the form usually told. Early references to agave production—such as de Arregui’s records from 1621—are not tied to a single founding figure (historian Miguel Claudio Jiménez Vizcarra was the first to show this: the first Sánchez de Tagle did not even land in America until 1695). Mezcal-wine production was a dispersed, regional phenomenon, not the invention of one entrepreneur.
Another common myth is that all early producers were smugglers operating underground. That too is a distortion. The system was varied: some worked under an asiento, some sold through an estanco, some really did distill without permission. But the colonial administration was not blind—it saw the production, knew about it, and more often tried to draw income from it than destroy it. The image of the heroic smuggler hiding his still from Spanish soldiers is a romanticization that obscures a more interesting reality: the chronic tension between imperial trade policy, local fiscal needs, and the stubborn economy of agave.
I think these myths survive so long because they are simpler. One founder, one ban, one moment of legalization—that is a convenient linear story. Reality, meanwhile, is dozens of decisions made by different people in different decades, often contradicting one another, and the slow, almost geological formation of an industry from layers of land, law, and craft.
At the end of the 18th century, the word “tequila” was a toponym—the name of a place, not a drink. When documents referred to mezcal de Tequila, they meant mezcal from Tequila, much as one might mean wine from Bordeaux or cheese from Parma. The drink was a variety of mezcal tied to a particular geography. All mezcal is an agave distillate, but mezcal from Tequila gradually came to be seen as something separate, something special, linked to a particular agave variety, particular soil, and particular distilling tradition.
The transition from geographical designation to an independent name took more than a century. Mexico’s independence in 1821 removed colonial restrictions on production, but created new—Mexican—rules. The industry grew, the Cuervo family remained one of its largest producers, and little by little the word “tequila” began to separate from “mezcal” in everyday use, in trade, and then in legislation. The modern appellation system—the Denominación de Origen Tequila—was officially established only in 1974, nearly two centuries after Cuervo’s license.
That timescale matters. Between the earthen oven in which Indigenous people roasted agave in 1541 and a bottle bearing the “Tequila” label, protected by international law, lie more than four hundred years. The license of 1795 sits roughly at the midpoint of that arc. It is neither the beginning nor the end, but the point at which craft, land, and bureaucracy came together tightly enough to create a lasting structure.
The history of José Cuervo is not a tale of sudden inspiration, nor a legend about a royal decree that created a national drink with a single stroke of the pen. It is a story of slow accumulation: the land received by José Antonio de Cuervo became the foundation; the agave growing on volcanic slopes became the raw material; the colonial fiscal system, for all its contradictions, became the framework; and the license of 1795 became the document that recorded an existing reality and gave it legal form.
The Crown wanted money. Local people wanted to drink. Producers wanted to sell. From that threefold pressure—fiscal, consumer, and entrepreneurial—an industry took shape that outlived the Crown itself, the colonial era, and several Mexican revolutions. Agave grows slowly—seven to eight years pass from planting to harvest. An industry built on such a plant does not spring up overnight either.
When a bottle of José Cuervo bears the date “1795” today, it marks not a moment of invention but a moment of legalization. Behind it lie a century and a half of production without paperwork, decades of colonial tax experiments, earthen ovens and stone mills, the scent of caramelized agave over the Tequila valley. And ahead lay another two centuries before the drink would receive its present name in international law. Charles IV’s document is still kept in the archives, and researchers continue to argue over the details of its wording.