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By March 20, 2018 1 Comments Read More →

The Cannabis Impact on San Luis Obispo’s Wine Industry

By Emily Earlenbaugh

There’s a new normal, and the cannabis space – once made up of small, mostly unregulated cultivators – is developing into a full-scale organized industry in California. The passage of prop 64 brought a new, highly regulated licensing system into play, and cannabis entrepreneurs are emerging from the shadows into a legal, regulated marketplace.

But what impact does this have on California’s central coast wine communities?

Changing Laws: Cannabis in SLO?

With the new state laws regarding cannabis, each county and city has had to make decisions about what cannabis activity would be allowed within their borders. While you might think cannabis is expanding, when it comes to San Luis Obispo county, it might be headed in the other direction.

“San Luis Obispo is very conservative at the county level.” explained Sean Donahoe, President of Operative Investments , a company focused on providing advice for cannabis businesses. “There’s a socially conservative majority that have really taken a step back on support for cannabis.”

According to Donahoe, while there was previously a law on the books that allowed for medical dispensaries, they never actually issued a medical dispensary license. “Now that they’ve gotten rid of storefronts, they believe that all retail in the county should be through delivery services only. They’ve also restricted a lot of the greenhouse operations.”

Marie Roth, Executive Director for the SLO County Cannabis Association, agrees that things haven’t been easy for canna-businesses. “I still don’t see a whole lot of movement publicly supporting cannabis retailers or cultivation in the county” she says. “You have to be a lone wolf and have all of your own resources if you are going to be a cannabis farmer of any kind” she explains, “unless they’re prepared to share a percentage of their business with an investor. How does this correlate to our small boutique-y (legacy) growers? They are being pushed out.”

This is in stark contrast to the neighboring Monterey and Santa Barbara counties. Donahoe shares that “there’s over 150 cultivation licenses issued in Monterey County, probably close to 200 in Santa Barbara County and only 1 in San Luis Obispo County. That’s a clear example of the anti-cannabis position of this county’s board of supervisors and their ordinance that just isn’t working” says Donahoe.

Still, while the unincorporated areas of San Luis Obispo County are difficult for cannabis businesses, Donahoe says there is some progress in the individual cities. Grover Beach is already giving out storefront licenses and Morro Bay and the city of San Luis Obispo, for example are open to cannabis retail locations. Arroyo Grande and Paso Robles are both working towards licensing delivery services.

Wine Industry Reactions

While legal, regulated cannabis is just getting started in San Luis Obispo County, and at least some members of the SLO wine community are very positive about the new cannabis industry.

“We are very, very strong supporters of medical marijuana, and have been for a long time.” said

Doug Beckett, Owner and Founder of Peachy Canyon Winery in Paso Robles. “I think if we look at the health benefits that had been suggested with red wine and the health benefits that have been suggested for medical marijuana, I don’t see a conflict.”

Heather Muran, Executive Director of the San Luis Obispo Wine Country Association says that in SLO they don’t consider themselves to be in competition with cannabis. “Our focus is on simply making great wines, telling our story, and cultivating a remarkable coastal wine country destination for visitors.”

Still, it is uncertain whether this represents the view of the wine industry in general. The majority of SLO wine makers queried declined to comment, perhaps an example of the negative stigma that still exists around cannabis. 

Chris Matthews, sales director for Blaze software and owner of local cannabis delivery service SLO Compassionate Care, believes some in the wine industry do not welcome cannabis.  “There are still some very old-school industry professionals that truly believe cannabis is bad” he explains, adding. “It’s been tough for the industry”.

Water Wars

Why has San Luis Obispo County been so slow to move forward? Some say concerns over water rights are at the root of the problem. “This whole cannabis thing is emerging right smack dab in the middle of some real water wars that we’re having here.” says Roth, noting how often water comes up on the local government’s meeting agenda.

“Water is always paramount anywhere in California. It’s always kind of a water war” adds Matthews, saying that some wine makers are “concerned that their wells are going to be tapped, that the water offsets are going to be too great to continue cultivating.”

“A lot of people had the conception that cannabis uses more than wine” he explains, adding that the most recent data shows similar usage for both industries.

Amanda Ostrowitz, Chief Executive Officer & Founder of CannaRegs, a website that educates about cannabis regulations, points out that much less water is being used by the cannabis industry as their parcel sizes are so restricted when compared to those cultivating wine.

Labor Shortages

Still, Donahoe argues that the biggest source of conflict will be over labor. “We already have these two industries, wine and cannabis, vying for workers.”

Ostrowitz also cites this worry, explaining that “cannabis companies have been known to pay better than a lot of other agricultural jobs. In Colorado, they’ve shown that fast food and certain restaurant companies are struggling to keep workers.”

“Someone has already brought that up to me” says Matthews of a wine industry friend. “They said ‘If my picking crew can go in and make $150 a pound trimming cannabis, they’re going to do it.”

But Donahoe says cannabis reform isn’t the problem here. Far from an increase in cannabis jobs in SLO county, cannabis jobs are currently being lost. “We are being asked to shut down one operation that I’m affiliated with.” Donahoe explains. “We had to fire 86 workers.”

The real problem? Donahoe says it is the low unemployment rate and “obviously the federal immigration policy.”

“We shouldn’t be at each other’s throats.” he argues “That is the line in the cannabis industry. Rather we should be addressing comprehensive immigration reform.”

Despite the labor and water concerns, there is sense of hope that the two industries can co-exist in SLO County and be able work together on issues they both face, instead of battling it out.

Sean Donahoe, and Amanda Ostrowitz will both be featured speakers on May 10th at the Wine & Weed Symposium, Central Coast, in San Luis Obispo. They will be covering these topics and more, to purchase tickets click here

1 Comment on "The Cannabis Impact on San Luis Obispo’s Wine Industry"

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  1. Kip says:

    Follow the money. If select people find pot to be a better or equal social experience to wine, wine will take a back seat. Some analysis I have read says there is potentiality for more tax revenue– state and fed government than wine. Certainly distribution cost will/are less than with alcohol products. With some wine producers talking about adding the pot compound to wine it sounds like a perfect marriage-one and the same.

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