The grapevines that line rolling hillsides and sweeping valleys in Northern California’s wine country have become iconic – a symbol of the region’s rustic charm that helped California earn its reputation as a world-class wine and food destination.
But winegrapes have new competition: weed.
California’s legalization of recreational marijuana has led to the beginning of a major transformation of wine country. It’s been just seven months, but already investors are snapping up property where wine was once produced. Vineyard operators are developing expertise in cannabis cultivation. New, specialty marijuana businesses are sprouting up in Sonoma and Mendocino counties. And farmers who have long made a good living by growing and harvesting winegrapes are expressing interest in diversifying with marijuana.
“As a sustainable farmer, you have to be willing to change with the market, and with crops that are profitable,” said Steve Dutton, president of the Sonoma County Farm Bureau whose family farms 1,200 acres of pinot noir and chardonnay grapes west of Russian River Valley, as well as a few hundred acres of organic apples.
Farmers, outside investors and cannabis entrepreneurs see the landscape of California’s North Coast changing before their eyes. Their opportunities are particularly ripe in the fertile soils of rural Sonoma, Mendocino, Humboldt and Trinity counties.
“I think that cannabis and wine have amazing potential for a symbiotic relationship, and the reason this region is used for that production is the soil and the air and the unbelievable ecological qualities that we have up here in Northern California that are unique to the world,” said Amanda Reiman, community manager for Flow Kana, which recently bought the historic Fetzer winery property where the family got its start.
Poseidon Asset Management, a San Francisco-based hedge fund specializing in cannabis, was the lead investor for the $3.5 million purchase.
"AS A SUSTAINABLE FARMER, YOU HAVE TO BE WILLING TO CHANGE WITH THE MARKET, AND WITH CROPS THAT ARE PROFITABLE.” STEVE DUTTON, SONOMA COUNTY WINEGRAPE GROWER
The estate in the foothills of southern Mendocino County is being converted into a new cannabis processing and distribution campus, where its founders are also planning to host tourists for marijuana consumption and education – similar to tasting rooms at wineries.
Marijuana tourism could one day rival the region’s multibillion-dollar wine tourism industry, and grapes could be replaced with marijuana plants, said state Sen. Mike McGuire, a Democrat from Healdsburg, whose sprawling North Coast district includes a large portion of Sonoma County and the famed weed capital of the U.S. known as the Emerald Triangle.
“Winegrapes and cannabis have coexisted for decades, but we are now starting to see the reach of cannabis into wine country because it is a newly authorized agricultural crop here in the Golden State,” McGuire said. “Some winegrape farmers have begun to look at cannabis as a financial opportunity… Longtime vineyard managers have already started traveling to Colorado from Sonoma County to refine their cannabis farming practices.”
Grapegrowers are eyeing marijuana cultivation, in part, as a way to stay in farming.
“If it helped keep my farm business, sure. I have no idea what I’ll be doing in the future, I have no idea what my kids will be doing,” Dutton said. “My family has grown every crop that you can grow here in Sonoma County. At one time hops were profitable. My family farmed walnuts for many years and they became not profitable. We used to grow a lot of prunes here but then they went away. Then we started farming apples but we struggled for many years. Thank God we had grapes.
“They became profitable and have kept being profitable, but in the future, who knows?” he said. “I don’t think you’re going to see all these vineyards going away, but that’s not to say you won’t see an acre of grapes removed here and there for an acre of marijuana.”
VALUE OF GRAPES IN WINE COUNTRY: $55,000 TO $365,000 PER ACRE. VALUE OF CALIFORNIA CANNABIS: $1.1 MILLION PER ACRE.
An acre of grapes in Sonoma County is worth $75,000 on the low end to $185,000 on the high end. In neighboring Napa County, an acre is valued at $55,000 to $365,000, according to a new wine industry analysis by John Bergman, a longtime real estate broker specializing in vineyard estate sales in Sonoma and Napa counties.
An acre of NorCal bud, however, is worth $1.1 million, according to industry estimates.