Wine Spectator On California’s Emerging Cannabis IndustryJune 4, 2021
With cannabis legalization continuing to spread across the country, beverage alcohol players are keen to assess its impact on the drinks business. Because cannabis has been legal for a short amount of time, and consumers are still discovering it, it remains unclear how many consumers will trade a glass of Chardonnay for one of cannabis’s many forms, or elect to sample both.
California’s Francis Ford Coppola Winery sees cannabis as a way to engage a different audience. In 2018, the winery partnered with Humboldt Brothers, an organic, sun-grown cannabis farming company, to launch a limited-edition Coppola-branded cannabis product. Sold in high-end dispensaries throughout California, the tin canister, shaped like a 375-ml. wine bottle, included rolling papers, branded matches, a glass pipe and three different strains grown by Humboldt Brothers.
“The idea was to bring a trusted brand to people who are visiting dispensaries and say, ‘Here’s a brand that you know from wine, and here’s what we know about cannabis,’” says Corey Beck, CEO and winemaking chief for the winery.
Cannabis beverages are a more direct competitor to wine. They include de-alcoholized wine or beer infused with the cannabinoids THC and CBD, creating a low-dose drink comparable in effect to a glass of wine for its intoxication level. Currently, beverages account for just 5% of total cannabis sales but they are seen as a good introduction to cannabis, with great market potential, illustrated by Constellation Brands’ $4 billion investment in Canadian cannabis company Canopy Growth in 2018.
The range of products available for cannabis consumers—from those focused on medicinal benefits to connoisseurs of specific flavors and qualities—casts a wide net. Wine lovers may relate to the connoisseurship aspect. As cannabis becomes more recreationally accessible, people with high-end tastes may spend their dollars across multiple segments. For now, though, future market share is difficult to predict.
If federal legalization takes hold, the U.S. cannabis industry is anticipated to garner $100 billion by 2030, according to BDS Analytics. California is likely to control the lion’s share due to its geographics and population size. “California supplies more than half the country’s wine, and the majority of numerous other types of crops, and I think it’s eventually going to be both the biggest producer and consumer cannabis market in the world,” says Eric Sklar, CEO of St. Helena-based cannabis company Napa Valley Fumé.
California-grown cannabis is projected to boom over the next few years and account for 20% of the nation’s growth in the product by 2025. California leads all states, with $4.4 billion in retail sales in 2020, representing about 27% of all legal sales in the United States.
Beck believes the best way for the wine industry to answer cannabis’ robust push is to innovate, including creating new products and experiences, as Coppola has done. “What we do in California will help set a precedent as other states open,” says Beck. “We want to be as close to it as possible, and that comes through education, so we can make better decisions about how to run our business.” Wine Spectator has a full report on cannabis in its latest issue. —Aaron RomanoSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.