Stranahan's was founded by Jess Graber and George Stranahan, whom the whiskey is named after, in Colorado in 2004. In 1998, Graber, a volunteer firefighter, met Stranahan, the founder and owner of Flying Dog Brewery, while fighting a fire at Stranahan's barn. They struck up a conversation about whiskey, and were soon in business together. One of the first craft whiskey distillers in the US, Stranahan's is said to have "kicked off the Colorado distilling craze" with its whiskey and the designation it invented, Rocky Mountain Whiskey. It was Colorado's first microdistillery, and the state's first legal distillery since prohibition.
The first batch of Stranahan's Colorado Whiskey was distilled in 2004 and bottled in 2006. Stranahan's was sold to New Jersey-based Proximo Spirits in 2010, with operations remaining in Colorado. By 2012, Proximo had increased whiskey production from around 12 barrels per week to 30, with plans to grow into the high forties. Stranahan's was sold in 38 states and 7 countries until 2010, when Proximo decided to scale down sales to mostly the Colorado area, maintaining the whiskey's availability in its home state.
Since 2011, Rob Dietrich has served as Stranahan's head distiller, after taking over from original head distiller Jake Norris.