Napa Valley vintner Eric Sklar eyes move into cannabis as logical step

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Read more about cannabis commerce in the North Coast: nbbj.news/cannabis

North Bay entrepreneur Eric Sklar “loves to build things.” That is at least according to his freshman year college roommate from his days at the University of California, Berkeley.

“From doing a chain of restaurants to building a winery to now developing a delivery business for cannabis, he gets fascinated with something, figures out who is doing what and he’ll just plunge in and create something that never existed before,” said longtime friend David Brownstein, an antitrust attorney in San Francisco.

Sklar’s current role is as founder of Napa-based cannabis cultivation and delivery service Fumé.

Resiliency and a love for building companies literally and figuratively from the ground up have always been central to Sklar’s approach, Brownstein added.

A San Francisco native, he got his start in 1984 traveling with then vice presidential candidate Geraldine Ferraro and working with her media team. He later worked on the 1988 campaign of Democratic nominee Michael Dukakis, noting that his work on losing campaigns proved a crash course in resiliency and succeeding in business.

“Running a business is about being an organizer,” Sklar said. “That’s what a presidential campaign is about.”

Always keeping an eye on trends that were just around the corner, Sklar opened a successful chain of Washington, D.C.-based restaurants called Burrito Brothers at a time when Mexican cuisine was not as mainstream as it is today.

“He was just about the first guy to put burritos outside the ethnic neighborhoods,” Brownstein said.

That forward-looking approach caused Sklar to turn his sights back to California and the winery business, starting Alpha Omega Winery in 2006 in St. Helena after a U.S. Supreme Court decision found it was up to states to allow wineries to sell their vintages in state and across state borders directly to consumers without going through distributors. Many North Bay winemakers greeted the decision with joy and saw a jump in their profits on out of state sales that no longer required a middleman to take a cut, according to the Press Democrat.

Sklar also seized on the opportunity to build the business literally, according to Alpha Omega investor Kelly Trevethan who also owns AXR Napa Valley in St. Helena, also in the Napa Valley.

“Eric was very much involved in the construction project and getting the architects and builders and the design of what the property was going to look like,” Trevethan said.

He added Sklar’s experience with politics – which include serving on the St. Helena City Council, two years of which as vice mayor – helped move the project forward.

“He’s been successful at being able to work with different personalities and from the different parts of the equation in terms of starting a business from scratch.“

The desire to work directly with customers and enter developing industries invariably led Sklar into the nascent California cannabis sector after he sold his shares of Alpha Omega to one of his business partners in 2013.

Sklar’s most recent venture, a cannabis cultivation and delivery business called Fumé, follows a familiar direct to consumer approach.

“I don’t like having anyone between me and the customer,” Sklar said, although he noted he wanted to develop wholesale distribution as well.

The business grows its cannabis products out of Clearlake in Lake County and delivers throughout Marin, Sonoma and Napa counties in partnership with the cannabis delivery company, Eaze.

Read more about cannabis commerce in the North Coast: nbbj.news/cannabis

Sklar said while his company grows and packages the products and delivers them, Fumé pays Eaze a licensing fee for every delivery it makes, using their online platform which includes steps like signing customers up and verifying the validity of their drivers licenses.

The business started last year and has expanded rapidly according to Sklar, who said Fumé had about 30 full time employees and expected to double that over the next 12 months.

The company projects anywhere from $10 million to $11 million in revenue in its first year, Sklar said, noting cannabis continued to be a growing industry and he intended to be involved in every level of the production cycle, from growing to packaging to sale and delivery.

Sklar also said he wants to partner with and feature small farms as contract growers.

However, the venture has not been without its snags.

“We can’t ship on common carriers,” like FedEx and UPS because cannabis remained illegal at the federal level, Sklar noted. State law also prohibited cannabis purveyors like Fumé from advertising online or through social media, making it harder to get the word out about the new business, he added.

A brief spat with the owners of unaffiliated Fumé Bistro in north Napa over the identical name also made the news, although Sklar described the issue as a “one- day issue” in an email. “We have not heard any more about it,” he added.

Sklar also has his sights set on cultivating cannabis plants in Napa County. Even though the state licenses cultivation and production, local governments can set their own rules. So far, the Napa County Board of Supervisors has repeatedly voted to disallow commercial cultivation. Undeterred, Sklar and a group called the Napa Valley Cannabis Association intend to force the issue.

The group commissioned an independent poll in February finding 64 percent of Napa County residents would support a proposed ballot measure allowing commercial cultivation of the plant in unincorporated parts of the county.

The group intends to put a measure on the March 2020 ballot and Sklar said once drafted the measure could be brought to the supervisors, who would have the option to either place it on the ballot or craft a resolution of their own, potentially using parts of the association’s measure.

Time was also a factor in the fight to grow cannabis in Napa, as under proposition 64, which legalized cannabis in California, if no action to allow cultivation is taken before June 30, the county must undertake a costly environmental impact study required by the California Environmental Quality Act.

The legal cannabis industry in California was born just last year after voters approved prop. 64 and by many estimates is worth approximately $5 billion and growing. While that is good news for cannabis investors and entrepreneurs like Sklar, the business is still developing, unlike his past ventures.

“Every other industry I’ve been in has been one that’s been around for centuries if not longer,” he said. “This business is not mature at all and while you’re creating your business you’re also creating the industry,” Sklar said. Still, he described the experience of entering the cannabis industry as enjoyable, if hard work.

“When I worked on the Ferraro campaign it was seven days a week, 18 hour days,” Sklar said. “I don’t think I’ve worked so hard since then.”

Staff Writer Chase DiFeliciantonio covers technology, banking, law, accounting, and the cannabis industry. Reach him at chase.d@busjrnl.com or 707-521-4257.

Editor's note: This story was updated. Eric Sklar states his quotation in which he remarked on the other endeavors he's been involved in, they were "industries" as opposed to businesses. Also, in recalling his work on the campaign for Geraldine Ferraro, he worked 18 hour days, not eight hour days.

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