California finds ‘pot of gold’ in wine and weed

The ‘pot of gold’ is referring to the amounts of money that are to be made in wine and weed cultivation. An acre of cannabis is estimated to be worth in the region of $1 million, while an acre of wine grapes around $200,000. This is far more than conventional plants, with strawberries estimated at $70,000 and avocados estimated to be around $8,000. On January 1st, 2018 licenses are going to be issued to businesses to sell recreational marijuana to customers. California will be the biggest state in the US to sell recreational marijuana, and sales are estimated to be in the region of $5 billion. This is much larger than the sales of Colorado and Oregon, combined, where recreational marijuana is legal in both states.

Sour Grapes

Grapes were previously the crop of kings; however,cannabis cultivation could be five times more lucrative. Which is why many in California are thinking of making the switch to marijuana. It is not just wine farmers that are making the switch. Farmers of all types are considering the move. Many would be crazy not to. The profit margins are huge and they already have the infrastructure and the expertise. It makes complete sense to transfer to the upcoming marijuana industry.

But it is not all roses for California farmers. Many researchers have estimated that the total current production of marijuana is as much as 12 times more than demand. Marijuana legalization in California is not exactly a well-kept secret. Many are in on the game, perhaps too many. Many millionaires will be made, as well as many bankrupt companies. It is a completely new ball game and a brand-new industry. For many counties, rules are regulations are not even in place yet, and who knows how much marijuana the residents of California will actually consume? How many people will simply prefer to grow their own crops instead of relying on recreational businesses? There is simply no way to tell, and the battle will be fierce in the industry during the first number of years.

Free Market v Intervention Policies

Which is arguably the way it should be. Let the best of the best survive on the marketplace battleground in a world of pure free market economics. The cheapest company with the highest quality marijuana will survive. If there is any corruption then residents can simply grow their own, as that option is available to them.

This is not the case in all states. In Florida and Pennsylvania, permits for medical marijuana have been given to a select number of dispensaries and companies. Recreational marijuana is illegal and if you want to get treatment you only have one option. A select number of rich companies cultivating all of the marijuana. What could possibly go wrong there?

Wine v Weed

Many in the wine industry are afraid that cannabis cultivation is going to be bad for the industry. There is speculation, though no definition proof, that marijuana legalization leads to a decrease in alcohol. According to winemaker DavikaMaskey:

Instead of the mom having a glass of wine before bed, maybe she’ll have a hit of cannabis before bed, so they’re worried that people are going to choose cannabis over wine.”

But what is more worrying for wine producers is that labor will be poached and that valuable land will be bought out. After all, the climate that wine thrives in is also perfect for many strains of marijuana. But others suggest that these fears are overblown, and that the industries and the products even complement each other. And the prices of marijuana are going to drop with the increase in supply. With 12 times as much marijuana supply compared to demand, prices for an acre of cannabis might hit half of what they currently are now. And the wine market is well known and well established. Cannabis cultivation is the Wild West in terms of rules and regulations. The existing rules and regulations are going to be extremely prohibitive to cannabis cultivators. Cannabis is going to be the most highly regulated crop in California. While many are jumping ship, it is not going to be clean sailing all the way through, and not every cannabis business is going to make it. The battle of wine v weed is only just beginning. And it may not even be a battle. In the words of wine vintner Dennis De La Montanya:

“I think there’s an opportunity for both industries to flourish in this community,”

The Future of California Wine

While there is going to be some teething issues and a definite drop in the price of marijuana, in the long run marijuana is going to be a wildly successful industry in California. Both weed and wine will survive and there is no reason to set one against the other, as consumers definitely love both. It is hard to see people completely giving up wine for weed, and more likely that people will consume the same amount of wine while also ingesting marijuana, as previous studies have suggested.

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