Wine and Weed Turn Frenemies in California

Cannabis and alcohol industries become frenemies in wine country california (franckreporter/iStock)
Drinkers who don't toke say cannabis makes them feel bad and doesn't fit their lifestyle. (franckreporter/iStock)

At the Hyatt Regency Sonoma Wine Country, a hotel so reliant on vineyard tourism that it’s literally in the name, cannabis growers and alcohol people are sizing each other up.

Two cars park valet on the sidewalk next to the front door. A black Jaguar F-Type is boxing in a lifted Toyota 4WD with Oregon plates, mud tires, and Hella-brand off-road light lens covers.

Inside the posh lobby, waitstaff run both a gas fireplace and the air conditioners. Down the hall, 500 attendees check out 40 vendors and a series of talks at the at the second annual, $400-a-ticket Wine+Weed Symposium.

You could get your entire THC-infused wine company up and running at the Hyatt today, with insurance, lawyers, soil, pest control, labeling, consulting, and labs. But still, it’s not as if sparkling wine giant Korbel was rolling out the red carpet and pouring brut. On the global stage, as well as the local, cannabis and alcohol have turned into straight frenemies. Friend and enemies.

Korbel doesn’t booth at the symposium, but Big Alcohol’s players are quietly in attendance, seated in the darkened ballroom, watching PowerPoints and taking notes as Jessica Lukas, vice president of cannabis data firm BDS Analytics, drops data science like bombs.

It's Safer Than Alcohol
Unless you're a pint of Ben & Jerry's

“For alcohol companies, there are risks” inherent in the growth of cannabis, Lukas says.

  • Fifty-four percent of people combining cannabis and alcohol report drinking less alcohol, especially hard alcohol.
  • Alcohol companies are going to lose “units drank” per occasion, entire drinking “occasions,” and an entire class of drinkers to cannabis, Lukas tells the crowd.

But after looking at the BDS Analytics survey data, as well as sales receipts in legal states, Lukas is still bullish on the duo’s frenemy-ship. BDS Analytics found that cannabis ($9.2 billion in retail sales in 2017) both complements and competes with alcohol. Consumers are going to see savvy alcohol brands diversify to limit booze losses while adding weed revenue. That’s why:

  • Constellation Brands spent $4 billion last week upping its stake in Canadian cannabis company Canopy. They’re doubling down on an earlier bet that paid. Quadrupling down, to be exact.
  • Lagunitas Brewing’s Hi-Fi Hops has the marquee booth at the symposium.
  • Molson Coors is doing a cannabis beer in Canada.
  • the founder of Blue Moon is doing a cannabis beer in Colorado.
  • Rebel Coast Winery sold out its first run of an alcohol-free, THC-infused sav blanc this week.

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Hi-Fi Hops is for IPA beer lovers past their prime years of tolerance. (Courtesy of ABX)
Hi-Fi Hops is for IPA beer lovers past their prime years of tolerance. (Courtesy of ABX)

Friends: The Equal Opportunity Consumer

There are a lot of good reasons for cannabis and alcohol people to be stoked on one another.

Booze and weed “have been co-existing for thousands of years,” Lukas notes.

BDS Analytics found that 72% of cannabis consumers also enjoy alcohol. Cannabis users are more likely to drink than people who don’t use cannabis but are open to it (what BDS Analytics deems “acceptors”) and outright “rejectors” that haven’t used in the past six months and have no plan to.

“Not every cannabis dollar spent is a dollar taken away from alcohol.”
Jessica Lukas, VP, consumer insights, BDS Analytics

Cannabis consumers tend to be epicureans. We like the finer things in life. “Not every cannabis dollar spent is a dollar taken away from alcohol,” Lukas says.

But here’s the thing about us dual-use epicureans: We like to pair other stuff with cannabis more than booze. We told BDS Analytics researchers we pair cannabis with movies, snacks, fitness, or dining more than we like drinking and smoking (aka “cross-fading”). Almost of half of dual users say cannabis and alcohol are for different times of the day.

Love, but not In Love: Cannabis users have bigger priorities than drinking. (courtesy BDS Analytics)
Love, but not ‘In Love’: Cannabis users have bigger priorities than drinking. (Courtesy of BDS Analytics)

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Enemies: Epicureans Divided

At lunchtime, there’s nary a whiff of weed in the air in the sunny, hot Hyatt garden. Instead, there are murmurs of a backlash to legal cannabis commerce in Wine Country.

Wine folks are split on how to react, says the Wine Industry Network founder, CEO and Symposium promoter George Christie.

“Because the wine industry is so competitive, the idea of now having to tackle another competitor in the form of the cannabis industry is a little bit daunting,” he says. “There are some fears out there that are warranted to a degree.”

Neighborhood NIMBY groups have long dogged the wine industry. Now, they’ve set upon legal cannabis interests in the valley. Dairy farmers and horse breeders are teaming up with save-our-neighborhood groups to sharply limit or terminate licensed cannabis farms in Sonoma. At a tense recent meeting, a cannabis farm moratorium failed on a narrow, 3–2 vote.

Cannabis stigma is still very real, even in what BDS Analytics calls “Level 1” legalization states such as California and Colorado that have full adult-use and medical legalization. One-third of adults 21 and over in Level 1 states enjoyed cannabis during the past six months, versus 60% to 75% for alcohol.

Among drinkers who don’t use cannabis, the leading reasons are both cultural and physiological:

  • They don’t think it’s a “lifestyle fit.”
  • They dislike the way THC makes them feel.

This red wine brigade sometimes teams up locally with “rejectors,” who tend to be older, conservative, retired, rural, and frankly, less happy with their lives, according to Lukas’s data.

Vintners see this and wonder if “an enemy of my enemy is my friend,” says Christie.

That’s especially dangerous thinking, he notes. Cannabis farm over-regulation sets a terrible precedent that could backfire on traditional agriculture.

“[Traditional ag] may not be pro-cannabis, but they are pro-land rights and pro-agriculture,” Christie notes. “They’re stuck.”

Smell Test: Future cannabis consumers might never like flower. (courtesy Wine+Weed Symposium)
Smell Test: Future cannabis consumers might never like flower. (Courtesy of Wine+Weed Symposium)

Fear of the Unknown

“A lot of times, it’s the unknown you’re most afraid of,” Christie adds. “Time passes and you find out, ‘It wasn’t as bad as I had thought’.”

Society’s big unknown will be the next generation of drinkers or smokers, the first to come of age in the post-cannabis prohibition era.

Right now, says Jessica Lukas of BDS Analytics, they’re creating lifelong habits, choosing among legal cannabis and alcohol options. “That’s going to be the future.”

Some might never drink bitter IPAs or biting zinfandels. They might love no-calorie, low-THC-infused sparkling hop water.

“Beer tastes horrible,” says Aaron Woodall, a comedian and self-described “recovering Mormon” in his 30s. I caught him on stage later in Sacramento a few days after the Sonoma event. After growing up square and sober, Woodall is discovering inebriants for the first time. In his act, he mocks the concept of “acquired taste.”

“That’s just a nice way of saying something tastes terrible,” he says. “I want something that tastes good right now. I don’t want to have to get used to it. You know what tastes good right now? Mike’s Hard Lemonade and weed. Taste great. Right now.”