Interview: Stephanie Honig, President, Napa Valley Cannabis AssociationJanuary 5, 2021
Wine industry veteran Stephanie Honig has been an early advocate for the cannabis industry in California wine country, co-founding the Napa Valley Cannabis Association (NVCA) and serving as its president. While NVCA’s efforts to extend Napa Valley’s fame into the cannabis category by allowing commercial cultivation have yet to bear fruit, the organization is pushing forward, confident that cannabis has a role to play in the valley’s future. SND Cannabis Edition recently caught up with Honig to get her views on the emerging cannabis segment and hear about why she believes the widespread rollout of cannabis beverages in particular will be a game-changer for the category.
SNDC: Why do you see cannabis beverages as a key opportunity moving forward?
Honig: According to a report by Grand View Research, the global cannabis beverages market is forecast to grow to $2.8 billion by 2025, escalating at a compound annual growth rate of 17.8% over the next four years. Canadian companies are dominating the cannabis beverage space, due to the federally legal status of cannabis in our neighbor to the north. However, the U.S. is poised to grow its market share and position itself as an industry leader as soon as we have federally legal cannabis, which is likely to be coming soon in a Biden-Harris Administration. I anticipate this being accelerated by a depressed post-Covid economy. The need for increased tax revenue, the pressure to create new jobs, the industry’s efforts to eliminate the black market, and the new states which legalized cannabis in the November election will also create excitement about cannabis beverages. Right now, cannabis beverages are being created by small entrepreneurs in locally produced lots, following different regulations state-by-state. Once federally legal, big players in the highly regulated alcohol market will see what’s available in the entrepreneur market and jump in, snapping up the best and brightest ideas and creating new ones of their own.
SNDC: So the similarities between alcohol and cannabis will lead to drinks industry players carving out space in the emerging market?
Honig: Definitely. In the drinks industry, we know how to sell a regulated product. We have the points of distribution, and we have the infrastructure. Premium alcohol products have been highly successful in creating brand loyalty. Many of these lessons in marketing, distribution and branding made famous by the spirits industry will be applied to successful premium cannabis beverage products as well. The larger wine, beer and spirits distribution companies are positioning themselves aggressively to mimic their sales model with the cannabis industry once they can ship across state lines. At the moment, with cannabis still listed as a Schedule 1 drug, alcohol distributors are fearful that any investment or venture in this space will jeopardize their existing licenses. Some have invested in Canada, others have begun working with CBD exclusively, and others are having conversations behind closed doors trying to figure out how to position themselves to benefit financially from cannabis legalization, which is imminent.
SNDC: What do you expect to see in the cannabis beverage market a few years down the road?
Honig: While the most established cannabis companies are focused on being vertically integrated and building independent distribution networks, the market will dictate a hybrid sales structure. Medium to small cannabis beverage brands will rely on existing distributors for wholesale business. The evolution of digital marketing will also help the smaller producers engage direct-to-consumer, just like in the wine business.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.
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