The distillery was first called Ledaig, pronounced Letch-ick, and it ran fitfully through the early 19th century. By 1837 production had stopped. Sinclair put the place up for sale in 1844, again in 1849, and was still trying in 1851. Nobody wanted it. The buildings sat silent above the bay for nearly forty years. Then in 1876, Dr. Neil M'Nab Campbell bought it, refitted it with new equipment from a Townsend foundry, and brought distilling back to Mull. The Mackill brothers of Glasgow took over by 1883 for £9,300, went bankrupt four years later, and the cycle began again. In 1888, the Glasgow merchant John Hopkins & Co picked up the keys. The brand they pushed, Old Tobermory, would be advertised in newspapers from Berkshire to Oxford. The whisky was finally finding an audience beyond the island.

In 1916 the distillery was bought by Distillers Company, the dominant force in Scotch whisky. Then came American Prohibition, and demand collapsed. Malting at Tobermory ceased in 1930. Only token shipments left the bay. The company's two main labels at this point were Old Mull and Old Tobermory, both fading. In 1936 the distillery was sold to John McLean of Edinburgh, who promptly stripped it out: the entire contents were transferred to bonded warehouses in Campbeltown, on the Kintyre peninsula. Tobermory went quiet again. The colourful houses on Main Street looked down at an empty distillery for the better part of four decades. It would not produce another drop until 1972, when it reopened under the Ledaig name and immediately began another cycle of receivership and rescue.

In 2012, Mull endured its driest summer in thirty years. The small private loch that feeds the distillery dropped so low that production had to be halted to protect the consistency of the spirit. The following spring brought more dry weather and a second shutdown. Whisky on a small Hebridean island is at the mercy of weather that nobody else cares about. The same year as the first drought, Burn Stewart Distillers, which had owned the distillery since 1993, was bought by South Africa's Distell Group for £160 million. Heineken later absorbed Distell. So a single malt distilled at the head of a Mull sea loch is now produced by a company ultimately owned in Amsterdam. The whisky itself remains stubbornly local, matured ten years in oak, with the heavily peated Ledaig still made in small batches under the original name.

In October 2020 the distillery launched Tobermory Hebridean Mountain Gin, built around three things the island grows itself: wild heather, rowan berry, and rosehip. The following April, it was named best gin in the world at an international competition. The distillery sits where it has always sat, at the foot of the steep hill that rises behind Tobermory, beside the painted houses, at the inner end of the bay. Visitors walk down Main Street past the lilac bakery and the red Chinese restaurant, past the clock tower that Isabella Bird funded as a memorial to her sister, and arrive at a working distillery that has been making spirit, with long interruptions, since George Washington was president.