Wine – MJ Shareholders https://mjshareholders.com The Ultimate Marijuana Business Directory Mon, 15 Oct 2018 22:00:43 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.5 Marijuana is emerging among California’s vineyards, offering promise and concern https://mjshareholders.com/marijuana-is-emerging-among-californias-vineyards-offering-promise-and-concern/ Mon, 15 Oct 2018 22:00:43 +0000 http://www.thecannifornian.com/?p=17037 SANTA YNEZ VALLEY, Calif. — It is the fall harvest here in this fertile stretch of oaks and hills that produces some of the country’s best wine. This season, though, workers also are plucking the sticky, fragrant flowers of a new crop.

Marijuana is emerging among the vineyards, not as a rival to the valley’s grapes but as a high-value commodity that could help reinvigorate a fading agricultural tradition along the state’s Central Coast. Brushed by ocean breeze, cannabis has taken root, offering promise and prompting the age-old question of whether there can be too much of a good thing.

Cannabis has been fully legal in California for less than a year, and no place is generating more interest in it than the stretch of coast from Monterey to here in Santa Barbara County, where farmers now hold more marijuana cultivation licenses than in any other county.

John De Friel, CEO of Raw Garden, at his cannabis farm in Buellton, Calif., this month. The farm sits among cabbage patches and wineries in Santa Barbara County, where agriculture is being reshaped by legalized marijuana. MUST CREDIT: Photo for The Washington Post by Philip Cheung

The shift in legal cultivation patterns is coming at the expense of the remote Emerald Triangle, the trio of far-northern California counties where an illegal marijuana industry has thrived for decades. The Central Coast is not growing more marijuana than the Emerald Triangle, but it could be on track to grow more legally, if trends hold.

“We’re nearly right in between Los Angeles and San Francisco, the two big consumer hubs,” said John De Friel, whose 17-acre Raw Garden Farm and seed lab sits among cabbage patches and wineries. “We really didn’t foresee how advantageous that would turn out to be.”


Related: Inspired by wine industry, California cannabis growers seek to protect regional identities


The regulated California cannabis market is a $4-billion-a-year industry, a boon to the local tax base and to a generation of entrepreneurial farmers more schooled in the agricultural sciences than in the dark arts of deception.

But legalization already is reordering the business and geography of cannabis cultivation, pushing crops into places they have never been. The new cultivations are challenging long-held beliefs in some conservative communities, including this one, where a rural libertarian streak is confronting a crop still stigmatized despite its legality.

The novelty of cannabis here also is a benefit. In northern California, the marijuana industry’s decades-old outlaw culture has proved a major obstacle to transforming the black market into a legal one. With so much lower-cost, unregulated marijuana on the market there, farmers complying with the stiff, expensive new regulations are struggling to make it into the light.

Here, along the Central Coast, growers complying with the licensing process are having an easier time without a thriving black market as competition. California farmers have only until the end of the year to meet the licensing and regulatory requirements – a process that can cost hundreds of thousands of dollars – or face the law.

Glass House Farms CEO Graham Farrar shows off cannabis buds this month. MUST CREDIT: Photo for The Washington Post by Philip Cheung

While expensive, the commercial logic to get legal is undeniable. In approving recreational marijuana use in November 2016, California voters vastly expanded the legal market, which previously was accessible only to the roughly 200,000 residents with medical marijuana cards. Now, marijuana can be sold to the entire drinking-age population of the nation’s most populous state.

The initiative allowed counties and cities to make their own rules, including outright bans on sale and cultivation. As a result, hundreds of potential growers are still “jurisdiction shopping,” trying to find counties with the lowest cannabis taxes, the right climate, an experienced labor force and a favorable location.

Santa Barbara County set its tax on cannabis revenue at 4 percent, the lower end of the scale, hoping to attract farmers to a place where many agriculture jobs have been lost to the economics of free trade.

The approximately 330 acres under cannabis cultivation here is a tiny fraction of the land devoted to vineyards, which once helped replace a declining beef and dairy cattle industry in the valley. But government officials and growers acknowledge that more cannabis will come, in part because the “Santa Barbara brand” built by its pinot noirs could help sell the locally grown product to new consumers.

Just how much more is a concern to some government officials, all of whom see the need for new crops to boost the tax base but worry whether marijuana in the county’s northern hills and southern greenhouses will change the local culture.

“What sets Santa Barbara County apart is our willingness to face reality – that marijuana is already in our communities and that pretending it will go away on its own is fantasyland,” said Das Williams, chairman of the county Board of Supervisors, who opposed state legalization. “But I’ll be the first to say I hope it doesn’t get too big.”

Cannabis buds dry on racks at Vertical cannabis farm in Buellton, Calif. MUST CREDIT: Photo for The Washington Post by Philip Cheung

Along the southern tip of the county, up against the Pacific Ocean, a cut-flower industry once thrived. Acres of greenhouses nurtured carnations, daisies and orchids, supervised by the descendants of Dutch and Japanese immigrants who generations before picked this place for its climate.

The decline has been precipitous. Since the U.S. free-trade agreement with Colombia was signed six years ago, what was once a historic element of the county’s economy has been decimated.

Graham Farrar, in a pair of Vans, has stepped in.

A Santa Barbara County native, Farrar is the operating partner of Glass House Farms, which owns about five acres of greenhouse space just outside Carpinteria.

It is a state-of-the-art cannabis farm that produces thousands of pounds a year and has 50 employees, who unlike vineyard farm hands can work full-time because of the more frequent cannabis harvest schedule. Three annual harvests are common in cannabis greenhouse operations.

Standing in a greenhouse that once grew Gerbera Daisies and is now row after row of cannabis, Farrar notes the irony of his position.

The free-trade agreement was designed in part to help Colombia fight its problem with coca, the plant that supplies the key ingredient in cocaine. Instead, it opened up greenhouse space thousands of miles away, where he is growing what the federal government classifies as an illegal drug more dangerous than cocaine.

“Here we’re just replacing one cut flower with another,” Farrar said.

Farrar’s operation here is more clean room than farm.

A rack of dry-cleaned lab coats awaits workers, who pick, dry and package the flower for sale. There is a small nursery for research. And each greenhouse, rigged with drip irrigation, is fitted with a $100,000 odor-control device to keep the pungent cannabis smell from nearby homes.

“Hiding is no longer a valued skill,” said Farrar, 41, who worked in the software industry and has a degree in molecular biology and biochemistry. “The net of all this – the government, the climate, the compliance culture – is that this is a very goldilocks spot.”

Farrar also has secured one of three cannabis retail licenses that the city of Santa Barbara is issuing for recreational sales. His goal is to transform the traditional marijuana dispensaries, which often have the furtive feel of an adult book store, into something appealing to new customers.

There will be a Santa Barbara County-grown section, but the store will have flowers and oils from all over the state. Eventually, Farrar said, it will evolve into a showroom as more and more first-time users find what they like and then choose delivery services. California-grown cannabis cannot be legally delivered outside the state.

“Most customers have not even walked in the door yet,” he said. “And Santa Barbara, as a brand, rings a lot more bells for people than other places.”

A refrigerator at Raw Garden Farm contains 5 million seeds. MUST CREDIT: Photo for The Washington Post by Philip Cheung

The initial quarterly cannabis tax revenue is due soon at the county treasury. Some early estimates say it could run between $2 million and $3 million, money that will go toward enforcing the cannabis law with some left over for public services.

In recent weeks, sheriff’s deputies have carried out raids targeting farms in the backcountry areas of Tepusquet Canyon and Cuyama Valley, the county’s two traditional if small-scale marijuana-growing areas, seizing plants worth millions of dollars.

Large cannabis plants washed down into Montecito, just a few miles from Farrar’s greenhouses, during the catastrophic mudslides earlier this year. They served as clues that there are farms amid the avocado and citrus orchards that authorities have yet to find.

“I get that it’s a whack-a-mole approach, but we have to do something to make this fair for those complying with the law,” said Dennis Bozanich, the deputy county executive who manages the cannabis portfolio. “Our job is to make life as hard on them as possible and hope they may just go somewhere else.”

Williams, the board chairman who opposed state legalization, said the cannabis tax revenue also will help “to pay for some mental health services and save a few public libraries.”

But, given marijuana’s high profit margins, he worries that it will wipe out what remains of the cut-flower industry. He also worries about the cultural message that the proximity of cannabis production might send to the county’s young people.

“I grew up in this community, and I do not know, for any practical purposes, how marijuana could be any more accessible than it already is,” he said. “But I do see as a danger anything that legitimizes it any more.”

Hoop houses at the Vertical cannabis farm in Buellton, Calif. MUST CREDIT: Photo for The Washington Post by Philip Cheung

A few of the hoop houses at Iron Angel Ranch – steel, semicircle rings topped with plastic canopies that shield cannabis plants from the sun and wind – are high up a steep hill overlooking the Sanford Winery.

They are a legacy of the gray-market days, when farmers could grow marijuana for medical use. The risk of a raid was high. These were out-of-sight, out-of-mind “grows” that today are a small part of what the farm is producing.

Rows of hoop houses stretch out below, just along Santa Rosa Road, which connects Iron Angel to Highway 101, the main north-south artery just a few miles away. Mathew Kaplan, who helps run the farm and markets the cannabis under the name Vertical, said the 20 acres now under cultivation will grow to five times that amount by spring.

“We get lumped in with farmers in this county, and this county takes care of its farmers,” Kaplan said. “That just isn’t the case in other parts of the state.”

But Kaplan and his partners plan to make Iron Angel a destination, as well, borrowing from the model that Sanford and other neighboring wineries have used for years.

He said tourists might one day be able to stay in cabins around the 1,500-acre hillside property, which overlooks the Santa Ynez River, racehorse training stables and vineyards that stretch into the middle distance. Oaks dripping with Spanish moss cluster around the land. There are a few Black Angus cattle and a bobcat, though he calls the latter “the laziest or slowest in the world,” given all the deer around.

“I absolutely want more of us to come here; it would be great,” Kaplan said. “It’s always better to be part of a broader community.”

How many more? The high price of land here will limit the number of new cannabis operations in the valley. But the economics are appealing: One acre of marijuana yields a product worth about five times that of an acre of grape vines.

The county has considered capping how many licenses to allow. But for now, local officials are letting the market decide who comes and who survives.

“Agriculture is always changing,” said Joan Hartmann, the county supervisor who represents much of the Santa Ynez Valley. “For me, this is about keeping agriculture here and keeping it profitable.”

]]>
Wine and weed might not be allowed to mix in Temecula Valley https://mjshareholders.com/wine-and-weed-might-not-be-allowed-to-mix-in-temecula-valley/ Thu, 19 Jul 2018 17:53:27 +0000 http://live-cannabist.pantheonsite.io/?p=15923 In some regions of California, former vineyards are being converted to cannabis farms, wine conferences are having sessions about marijuana, and an up-and-coming job is cannabis sommelier.

While the wine and marijuana industries are similar in some ways, blending those worlds isn’t always easy. Winegrowers and cannabis cultivators increasingly square off over customers, land and workers. And lingering stigmas have kept some of the state’s wine-growing regions from being open to the newly legalized marijuana market.

Now it seems Temecula Valley Wine Country is on track to shut out the cannabis industry. Opposition from local winegrowers and government officials is making it unlikely that marijuana businesses will be allowed to operate in one of the most important agricultural and tourism regions in Riverside County.

“My fear is that you would see vineyards pushed out and there would be outdoor cultivation with chain-linked, barbed-wire fences,” said Danny Martin, board president for the Temecula Valley Winegrowers Association.

“We want to be the Temecula Valley Wine Country. We don’t want to become the Temecula Valley Weed Country.”

The message is clear, according to Micah Anderson, president of the cannabis cultivation trade group Southern California Responsible Growers Council.

“Wine is socially acceptable here,” Anderson said. “Cannabis isn’t.”

Ordinance carves out Temecula Valley

Though passage of Proposition 64 in 2016 made it legal in California for adults to consume cannabis, the law also gives cities and counties the authority to regulate most other marijuana activities within their borders.

All marijuana businesses are currently banned in unincorporated Riverside County. However, county leaders are considering an ordinance that would be among the most permissive in California, allowing businesses to grow, manufacture, test, distribute and sell marijuana products in most of the county’s unincorporated areas.

Grape vineyards in Temecula Valley Wine Country on Wednesday, July 18, 2018.(Frank Bellino, The Cannifornian/SCNG)

But, as proposed, the Riverside County ordinance would block marijuana businesses from two key areas — residential areas and the Temecula Valley Wine Country. The popular wine-tasting destination has a few dozen wineries spread over more than 17,000 acres of county-controlled land, just east of Temecula’s city limits.

Riverside County Planning Department staff said via email that cannabis cultivation is “not compatible” with the long-term planning for that area, which they said provides a “significant tourist attraction” and “economic benefit” to the region.

Supervisor Chuck Washington — whose district includes Temecula Valley and who once invested in an area winery — also opposes cannabis cultivation in the area because he doesn’t believe it would “further the goals” of the region, according to his chief of staff, Jeff Comerchero.

In a June 20 letter, Martin told Washington that the Temecula Valley Winegrowers Association board supported a ban on all commercial cannabis activities in wine country and asked the Board of Supervisors to “continue to deny all inconsistent land uses within this special agricultural area in our county.”

County staff said the first listed goal for the wine region is to “encourage agricultural cultivation.” Cannabis cultivation is an agricultural activity, Anderson said, with growers licensed by the California Department of Food and Agriculture. And cannabis, he added, should be treated as an agricultural product by local regulators.

But Martin insists that adding cannabis-related businesses in Temecula Valley Wine Country would be inconsistent with the existing zoning plan for the area.

Lessons learned

The wine and cannabis industries have coexisted for decades in places such as Mendocino and Sonoma counties, pointed out Josh Drayton, spokesman for the California Cannabis Industry Association.

But now that the state is licensing cannabis businesses for the first time, he said marijuana farmers can come out of the shadows to fight for the same rights and business opportunities wine growers have worked to secure.

“I think the cannabis industry has learned a lot from the wine industry,” Drayton said. “A lot of the challenges they have faced, and found solutions for, are guiding forces for our industry.”

That includes trying to brand cannabis products with appellations of origin. Meaning only marijuana grown in Humboldt County can have that label, just like only wines grown in Napa Valley can boast that origin.

Mom-and-pop wineries have also found creative ways to compete with bigger, corporate vineyards, Drayton said — a struggle that’s just starting for smaller and medium-sized marijuana growers. Transferable strategies might include tax incentives for small operators, boutique tours, paired dinners directed by sommeliers and direct-to-consumer sales that give owners a chance to sell the stories behind their products.

In Temecula Valley, Anderson said cannabis farmers would love to have tasting rooms just like the vineyards do. The county could permit such spaces, known generally as cannabis lounges, but hasn’t chosen to include that option in the proposed ordinance.

Competition is fierce

The industry overlap does pose some common challenges.

Labor costs are going up for growers of wine and cannabis, even as the size of the labor pool is shrinking, Drayton said, with the Trump administration’s immigration policies squeezing things even more.

“The wine industry has struggled with labor for a while,” said George Christie, president of the Wine Industry Network trade group. And with the growing cannabis industry able to offer some workers more money and better working conditions, he said, wineries are feeling the pinch.

Also, in many parts of the state, agricultural land is limited. And once a city or county votes to allow marijuana businesses, land values typically skyrocket, a phenomenon that has already forced out some wine growers.

Flow Kana CEO Michael Steinmetz addresses attendees at a grand opening celebration for Flow Cannabis Institute on a former winery in Redwood Valley. (Chris Pugh, Ukiah Daily Journal)

In early 2017, San Francisco-based cannabis distributor Flow Kana announced it had purchased 80 acres in Redwood Valley that were once home to the Fetzer family winery. The company is transforming the property into Flow Cannabis Institute, which is being billed as a “one-stop facility” for marijuana processing, storage and distribution.

Ampelos Vineyard and Cellars in Lompoc said in its June 24 newsletter that they were moving after their landlord of 12 years got a “high offer” for their property from cannabis producers.

“Sad to see how this new business is rolling into the valley and taking over land and buildings,” wrote Ampelos’ owner Peter Work.

Those threats have come up during the Wine & Weed Symposium, a conference Christie’s group will host set for its second year in Santa Rosa on Aug. 2. But Christie said a “much larger percentage” of the conference’s roughly 500 attendees — including a number of “older, conservative wine industry people” — is interested in hearing about opportunities available in cannabis.

Christie sees overlap not just with business models between the industries, but also with the type of people they attract. Wine growers, he said, are typically hard-working, passionate, strategic entrepreneurs who aren’t afraid of a challenge. He sees many of the same qualities in cannabis entrepreneurs, he added, and nothing of the stoner stereotype he once expected.

“As that stigma sort of erodes,” he said, “there are more and more people in the wine industry that are kind of open to what opportunities this may bring.”

There are already wine growers in the Temecula area who are experimenting with small marijuana grows, according to Anderson. And he said there are many more entrepreneurs waiting on the sidelines, hoping the county will open the region to licensed marijuana businesses.

Laws limit overlap

The trend of literally mixing these two worlds by infusing wine with cannabis was becoming fashionable a couple years ago, with singer/cannabis entrepreneur Melissa Etheridge touting a “wine tincture” in her line of Etheridge Farms products.

Then California issued the first draft of its still-evolving rules for the marijuana industry. Those regulations included a strict ban on products that mix alcohol and cannabis and severely limited public events where marijuana is consumed, such as the wine and weed pairing dinners that had begun popping up everywhere.

Since cannabis remains illegal under federal law, wineries could also be jeopardizing their federal licenses if they start making or selling cannabis products on the same property.

“There are a bunch of people that thought they were going to go that road,” Anderson said. “That left a lot of broken dreams.”

Rebel Coast Wine is marketing a sauvignon blanc infused with THC, the active ingredient in marijuana. (Photo courtesy Rebel Coast Wine)

Some companies, such as Hermosa Beach-based Rebel Coast Winery, are navigating the regulations by making cannabis-infused wine that’s alcohol-free. And event companies are trading infused dinners for tours that stop at both wineries and cannabis businesses.

Such ventures show that it doesn’t have to be a “zero sum game,” Christie said, where either the wine or the cannabis industry wins. And in Anderson’s view, they also show that marijuana entrepreneurs will work with any reasonable regulations that are thrown their way, including rules that he says could mitigate whatever safety, aesthetic or odor concerns neighbors might have.

That’s something he hopes Riverside County will take into consideration as officials write the playbook for how wine and weed will mix in Temecula Valley.

“We all want to be good neighbors,” he said. “Give us options, don’t just shut us out.”

The issue will be decided when the Riverside County Board of Supervisors takes up the proposed cannabis ordinance sometime later this year.

]]>