In 1909, the Tennessee legislature passed the Holladay Bill; which forbid the sale of liquor within four miles of any school in the state. The second law passed that day prohibited the manufacture of intoxicating beverages. The company also divided into 2 divisions: J.W. Kelly & Co. and Kelly Tobacco Company. Kelly Tobacco Company would be sold several times between 1914 and 1919.
In February 1911, Henry Kraver sold one-half interest in the Kentucky Peerless Distilling Plant to Carl White for $40,000 ($1.17 million in 2022).