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By April 4, 2018 0 Comments Read More →

The Cannabis Impact on Monterey’s Wine Industry

By Emily Earlenbaugh

The cannabis space is rapidly changing. With the passage of Prop 64 a new, highly regulated system for cultivating, processing and selling cannabis has come into play. These regulatory changes have provided new legal avenues for cannabis entrepreneurs to operate and grow.

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

Cannabis in Monterey: Progressive County for Cannabis but Cities Slow to Join

In our piece covering cannabis’ impact the San Luis Obispo’s wine industry, we saw that SLO county has taken a very restrictive policy towards cannabis. Monterey seems to be taking a different approach. “In my observation, the county of Monterrey has actually taken the most progressive stance on regulating commercial cannabis activities.” says Sean Donahoe, President of Operative Campaigns, a company focused on providing help and advice for cannabis businesses. Donahoe explains that “The county, which moved forward with large scale greenhouse production for both medicinal and adult use, also allows for an unlimited number of retail sites….You’re seeing a lot of applications for retail store fronts.”

Still, while the unincorporated county is moving forward with its progressive policy on cannabis, Donahoe says that cities in Monterey county, such as Monterey, Carmel, and Pacific Grove, are not moving as quickly. “They just don’t want to have any of it,” explains Donahoe of the local governments. “They say, let’s give that to the county.”

Land Wars in Monterey Unlikely

Monterey County also sets itself apart with a policy that allows for cannabis expansion without causing prime vineyard real estate to skyrocket in price. “Monterrey is really different. It’s not really going to be encroaching on the wine territory simply in that the way that the cultivation laws are written for Monterey County” explains Amanda Ostrowitz, Chief Executive Officer & Founder of CannaRegs, a website that educates about cannabis regulations.

According to Monterey’s laws, licensed grow facilities must have had a preexisting greenhouse on the property. “Wine isn’t grown in greenhouses, so it’s not like there were wineries getting kicked out of somewhere because cannabis growers were coming in” explains Ostrowitz.

Most of these greenhouse properties are left over from the flower industry, which left Monterey back in the 90’s when trade with South Africa opened up. Monterey couldn’t compete with the lower costs of production in South Africa, has many unused greenhouse properties, perfectly suited to be revitalized by the cannabis space.

Kim Stemler, director of the Monterey County Vintners and Growers Association, agrees with this assessment. “You can only grow inside existing greenhouses. So, there is not competition for land” she explains.

Still Stemler points out that while the county laws avoid competition for farmland, there is still some conflict over real estate. “There has been a lot of competition for warehouses” she explains.

Positive Reactions from the Wine Industry

Stemler also commented on the Monterey wine industry’s reaction to cannabis. She says that while the board has never taken an official position on the cannabis issue, in her experience the Monterey wine industry has been positive or neutral when it comes to cannabis.

“I haven’t heard much negative.” she explains. “There is not a sense of us losing market share because of cannabis.”

Part of this may be because Monterey’s policies don’t create much risk for the wine industry to be displaced by cannabis, but Stimler also says that cannabis is just another crop. “We grow a lot of the agriculture for the nation,” she explains. “So, it just fits right in to grow another crop. It’s not unusual to be growing anything in Monterey County! We’re growers. We’re farmers. Add another crop? It’s just not a big deal.”

Dan Tudor, winemaker for Tudor Wines, is one pro-cannabis wine industry professional who was willing to share his view. “Tudor Wines believes in democracy and the right to life, liberty, and the pursuit of happiness,” he explains, adding, “The voters in many states including California have chosen to end the destructive, costly, and counterproductive prohibition of cannabis. We support the voters of California and their decision.”

Tudor says that he hasn’t seen any negative changes in the county’s wine industry since legalization, and doesn’t foresee any problems.

Still, while we heard only positive words about cannabis from wine industry professionals, only one of the ten winery representatives we reached out to in Monterey were willing to share their view about cannabis and its impact.

Weed and Wine in Monterey: Conflicts or Mutually Beneficial Dynamics?

While things look good in Monterey for a non-competitive relationship between the cannabis and wine industries, there are still some sources of potential conflict.

Stemler says the only concern she’s actually heard voiced in the Monterey wine industry, is the potential competition for labor. “Labor is already tight anyway,” she explains. This issue came up in San Luis Obispo as well, and according to Donahoe is the biggest source of conflict between the two industries. Still he points to the federal immigration policy as the real issue. “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.”

Stemler notes that water could also be a concern for the wine industry, “but again, this is going back to warehouses,” she clarifies, pointing out the lowered water use for that growing context. “It’s very different than for row crops or vineyards.”

So what about mutually beneficial outcomes from these two industries co-existing in one county? Stemler says she doesn’t see this happening while cannabis is still federally illegal. “The big thing from a winery perspective is that wineries are licensed by the federal government.” Wineries can’t just engage in business with the cannabis space. “They have to be really careful,” Stemler explains.

Still, Ostrowitz notes that tourism could be a place where these two industries can benefit each other. “There’s plenty of demand for both, and I think bringing them together probably makes it a more appealing place overall,” she says. “Does the brewery get mad because a distillery moves in across the way, or do people come to visit both the distillery and the brewery because they’re close together?”

Tudor also believes cannabis legalization could be positive for his winery, saying “People with more freedom are more likely to enjoy their freedom with a glass of Tudor Wine.”

The legal regulated cannabis industry has just begun and no one can say for sure what the impact will be. However, things are looking positive in Monterey County for the wine industry as well as the cannabis space.

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

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