North Coast wine, cannabis could have ‘substantial synergies in the long run'

The emerging legal cannabis industry will have “substantial synergies in the long run” with the fine-wine business in the North Coast.

Initially, there will be competition between the two for labor in agricultural tasks such as harvest and in marketing, according to Nick Caston, vice president for public affairs and policy for Santa Rosa-based CannaCraft, an umbrella group for several edibles, distribution, production, laboratory and dispensary ventures. His background includes work with wineries and for the California Assembly Select Committee on Wine.

North Coast winegrape growers have been feeling the pinch in the past few years of an emptier pool of farm workers, partly because of improving prospects for jobs in construction and from the changing federal approach to immigration. The industry has responded with greater use of mechanized harvesting and increasingly for other tasks such as pruning and leaf removal.

“But after that settles out, I think you’ll see another access point for tourism into Wine Country, because it will have more focus on tourists who also want to look at cannabis,” Caston said. “Some of the same factors that make us a good wine region make us a good cannabis region.”

Including wine-like cues in cannabis marketing is Emerald Pharms, CannaCraft’s affiliate medicinal dispensary in Hopland. Opened two years ago, it has marble and wood finishes, and educators lead in-depth seminars for patients and curious alike on cannabis uses, varieties and geographic distinctions.

“It’s designed to provide a friendly experience for first-time cannabis patients,” Caston said. “It’s similar to what wineries do in their tasting rooms.”

There will be opportunities companies that support both wine and cannabis operations, he said. Those include firms that specialize in compliance with laws, rules and regulations, packaging suppliers such as label printers, farm labor contractors for help with harvesting and trimming, and financial services professionals focused on agribusiness.

But among the current challenges for farm labor contractors and other vendors in getting involved with cannabis is cash-based operations of a number of companies in the industry, Caston said.

“Especially, when you see the state moving to an appellation system,” Caston said. “There will be companies helping the cannabis community. It will be similar in structure to the wine world.”

That may lead also to diversification of crops, he said.

“If you’re an individual winery with a number of acres, you may dedicate an acre or half an acre to cannabis will help diversify their overall portfolios,” Caston said. “If you have rough wine year with low yields you may have a better cannabis year and make companies more stable financially to have two types of crops they can cultivate.”

Another potentially short-term point of conflict between wine and cannabis is pest control, he said. For the cannabis industry, there are no federally approved pesticides for use on cannabis as a crop.

“When you start to see fully legal cannabis cultivation integrated into the community, one of the biggest challenges for the cannabis cultivator is avoiding pesticide drift onto winegrapes,” Caston said. It could be around “who is using what and whether or not it means losing your entire crop of cannabis because it is not allowed to be used in any amount on the cannabis crop.”

Pesticides must be registered by the U.S. Environmental Protection Agency and the California Department of Pesticide Regulation before they can be sold and used in the state, according to the department. Currently, none are registered specifically for use on marijuana, and such use has not been reviewed for safety or health effects on people.

But state law does allow agents whose active ingredient is exempt from residue-tolerance requirements. Those include certain essential oils like cinnamon and neem, salts such as potassium and sodium bicarbonate, minerals like sulfur, and beneficial microbes and insects.

“But ultimately the benefits for the wine and cannabis industries will be substantial,” Caston said.

Caston is set to speak at the Business Journals’ Wine Industry Conference in Santa Rosa on April 28.

Jeff Quackenbush (jquackenbush@busjrnl.com, 707-521-4256) covers construction, commercial real estate and wine.