George Christie, the president of Wine Industry Network (WIN) said that the symposium was created in response to massive popular demand. “This all began as a one-hour panel at another conference we hold, and it was easily the best attended session we’ve ever had,” said Christie. “We quickly realized that it needed more than an hour.”
With the conference sold out weeks in advance, it seems like one conference might not be enough, and they might need a bigger venue for next time. Christie described the event as a way to better understand “the inevitable competition for consumer attention and how best to prepare for what’s coming and what new opportunities might exist.”
But while WIN was concerned with the chance of competition, the 400 or so event participants felt differently. Over the course of the day, the organizers conducted a straw poll and the results were telling, with 77 percent feeling there will be more collaboration than competition between both industries, and only 7 percent worried about more competition. Interestingly, most of the participants were from the wine industry (45 percent), nearly double those from the cannabis industry (26 percent), and quite a few worked in both (18 percent).
The event kicked off with opening remarks from State Sen. Mike McGuire, who represents the North Coast, from Marin County up to the Oregon border (including the entire Emerald Triangle and most of Sonoma County’s wine industry). McGuire said was proud of his district when it came to both of these industries, bragging: “The North Coast has the best cannabis on the plant and the best wine on the planet. This will continue to be the heart of wine and cannabis in the years to come.”
McGuire also looked to the future, and the need to prepare for “cannabis related tourism,” but he also did not ignore the present and the need to protect “our small family farms which are the backbone of this industry.” He was candid about the current state of cannabis regulations, saying California is “flying this airplane while it’s being built.”
Over the course of the symposium, several major themes were repeated throughout the day by many panelists, including concerns about over-production of cannabis, environmental issues, appellations, and the issue of wine vs. weed. Below, Cannabis Now broke down these crucial issues facing the California cannabis industry.
A couple major interrelated themes that came up across multiple panels were concerns over small family farms in the legalized market and the realization that California is producing way too much cannabis. In the Cannabis 101 panel, Hezekiah Allen from the California Growers Association laid out the stakes.
In CGA’s best case scenario, Allen said that “seven out of 10 growers either remain criminal or go out of business.” The CGA estimates that there are 50,000 farms in California and they anticipate regulators will only provide enough licenses for about a fifth of those farmers.
“We are overproducing cannabis and that is a real problem for the legal market,” said Allen. “Most cannabis has been exported for years. If California is legalizing without an active conflict, then we need to downsize the number of family farms.”
The active conflict that Allen is referring to is a dispute between state and federal laws, which could be used as a pretext to shut down California’s medical and adult-use systems in their entirety.
Tawnie Logan, who recently stepped down from heading up the Sonoma County Growers Alliance, echoed some of Allen’s sentiments during the last panel of the day. “We have a production glut in California; we are basically selling sand on a beach,” said Logan. “We have people coming in trying to make the biggest grow in California, but where are they going to go sell it?”
In order to deal with the production glut, federal law will need to change to allow cannabis to cross state lines, or consumption rates would need to dramatically increase in California.
Once cannabis can cross state lines, or even before it is allowed it, there is a way to save small farms in the face of corporate agribusiness, direct to consumer (DTC) sales. Tom Rodrigues, “a small producer” of wine who sits on the boards for both the Mendocino Winegrowers Inc as well as the Mendocino Cannabis Industry Association, said that he thinks the wine club model could also work for cannabis farmers. Amanda Reiman, vice president of community relations for Flow Kana, chimed in to say she’d “love to see a seasonal vegetable and fruit box that includes cannabis as well.”
Rodrigues was clear that things still aren’t perfect in the wine industry, and cautioned against expecting a quick win. “The prohibition of alcohol ended 90 years ago, and there are still five states I cannot ship wine to,” said Rodriques. “The prohibition of cannabis will not end overnight. Wine kills people, tobacco kills people, no one has ever died from too much cannabis, you’ll just sleep really good.”
Environmental concerns were another repeating theme for the days speakers. Rodrigues brought up the issue of growers fighting over access to water, and seemed to put most of the blame on the wine industry. “The vineyard people are saying ‘You’re using our water,’ but we all have to share the water,” he said. “I think there is smart farming in the cannabis industry that is not in the wine industry, like water capture.”
Logan was clear that it must be a communal effort, where both industries needed to “commit together that our business practices uphold the future of the planet.”
Reiman was optimistic, saying “necessity is the mother of invention. We’ve come up with many ways to be carbon neutral and more sustainable.” She also offered to “take what we [in the cannabis industry] are required to do” and use it to help the wine industry “to make them more sustainable.”
As someone familiar with both crops and the regulations over them, Rodrigues was miffed at the unfairness of the proposed cannabis regulations. “I don’t think it is fair that cannabis people are being asked to jump through the smallest hoops imaginable when wineries are allowed to spray round up all over everything, and it can get in streams and kill the fish, and that is fine,” he said. “The cannabis growers are some of the most organic growers around.”
Gov. Jerry Brown signed SB 94 into law back in June, creating the first set of appellations for the cannabis industry anywhere in the world. The symposium’s moderator, wine writer Tina Caputa, voiced a “concern some people have on the wine side: “If cannabis is being grown indoors or in a pot, how can it really be an appellation?”
Hezekiah Allen, a long-time advocate for cannabis appellations, said that California’s definition of appellation includes methods, varietals, practices and standards” and is more than just terroir — which is “where the plant is grown.” California’s multi-faceted definition of appellations could allow for a state-issued organic certification, a mold free certification, or even one to denote it was grown and processed to be carbon neutral.
Sam Edwards, the founder of the Sonoma Cannabis Company, added, “‘Extra virgin’ olive oil is a certification process on the method, that is really what we are talking about here.”
One topic that resurfaced all day long was whether wine and weed are competitors or companions?
“Cannabis probably has a 10,000 year cultivated history, wine has had about 8,000 of cultivated history,” said Allen. “These products have been paired together for countless years, which can be used in moderation or abused.”
Rodrigues got right to the dollars and cents, saying, “For wine people who are concerned about consumption dropping, consider that in Colorado the wine tax has gone up in the past two years, [which means] consumption has gone up. People are smoking more and then drinking more.”
Sam Edwards chimed in: “I don’t think we are selling less Budweiser in Sonoma county.”
When wine and cannabis attorney Rebecca Stamey-White was asked by the moderator about her wine clients being concerned, it was like the set-up for a joke. “No one pays my rate to call me to say they are worried,” she responded. “Most of the calls I get are people looking at it as an opportunity.”
White was also asked about vineyards hosting cannabis events, and felt there was “definitely a risk for a vineyard doing something with cannabis.” She explained that vineyards have a federal bond, and that to host a cannabis event or “anything federally illegal” would be risky. As for the legality of cannabis infused wines, White said there will be “a real difficulty” if a product is defined as wine but contains cannabis.
A great learning moment was when the NCIA’s Executive Director Aaron Smith enlightened the 45 percent of the crowd who were just from the wine industry and knew nothing of IRS Tax Code 280E. “Right now, because of 280E any business or individual who ‘traffics a scheduled substance’ cannot deduct standard business deductions like advertising, healthcare, any of the kinds of things you as a small business can deduct. Instead of seeing 33 percent rates, we are seeing closer to 80 percent. Try running a business paying taxes on your gross.”
This challenge was met with a mixture of shocked guffaws and stunned silence. Smith continued, “The Sword of Damocles above us is that Jeff Sessions, or whoever comes in next, could come in and arrest us for growing cannabis.”
It was not all business at the symposium; there was a healthy dose of social justice mixed in throughout the day. Allen got things started early, declaring that cannabis “needs to be descheduled, not rescheduled.” In his view, “Schedule II would be a catastrophe for the California cannabis industry, Schedule III is workable.”
Aaron Smith had other views on it, saying that even on a lower schedule, as long as they are compliant “growers won’t have to worry about being thrown into a cage for growing a plant.” To Smith, “There are lot of things we have to offer the mainstream industry, like social justice, [and] like the tech industry we can change the mainstream.”
Tsion Sunshine Lencho, who was at the symposium representing Supernova Women — an organization dedicated to the advancement of people of color in the cannabis industry — said, “If we are talking about social justice then we need to open the industry up to as many people as possible.”
TELL US, do you forsee a future where wine and weed producers will work together?