This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
Welcome to Reed Smith's viewpoints — timely commentary from our lawyers on topics relevant to your business and wider industry. Browse to see the latest news and subscribe to receive updates on topics that matter to you, directly to your mailbox.
| 2 minutes read

Cannabis and the wine industry.

One of the more interesting speculative debates over the past year has been whether the rapid growth of access to state-legal cannabis would affect the wine industry. Being located in Napa, California, the heart of the US wine industry, I have had many a spirited and thoughtful discussion about whether adult drinkers will substitute their glass of wine with a cannabis alternative (and here, we are talking about both non-hemp cannabis and hemp), a concern that also applies to beer and spirits as well.

Every year, Silicon Valley Bank, one of the most prominent lenders in the California wine industry, issues its State of the US Wine Industry report. (link) Written by Robert McMillan, founder of the bank’s Wine Division and a fount of information about the business of wine (his blog is also worth reading: (link), this annual report is a deep dive into the past and future of wine economics, demographics, and trends in the US.

I recommend you take the time to read his take on this debate, which starts on page 41, to see how a similar regulated industry – namely, adult recreational consumer products – views cannabis. Backed by data, he concludes that it is too soon to tell how much of an effect hemp cannabis will have on wine, but he does note that “we can say with certainty that cannabis isn’t helping wine consumption, and for the young consumer, legalization is probably hindering consumer purchases of lower-priced wine.”

Two specific points are worth noting. First, he asks “what if it is actually a complement and cannabis encourages wine sales in the same way that higher popcorn sales stimulate added butter sales?” I have discussed this same point with numerous winemakers here in Napa Valley, and although current California law does not allow for non-hemp cannabis consumption on premises (meaning, at the winery or the tasting room), perhaps someday a winery will be able to offer a mild edible to pair with a wine tasting to enhance the experience. With experiential and destination retail being a major trend in sales, including in the cannabis industry, a change in the laws could make this a natural fit.

Finally, the report speculates that “I worry more about CBD-infused beverages being defined in the narrative as healthy and wine being defined as unhealthy. In that context, CBD-infused beverages could become a real threat as a substitute for wine.” Further to the point, Mr. McMillan says that he “would expect to see a lot of small wineries playing with concepts. It’s just a question of time, but if I had to hazard a guess, it will be more than five years before we see a wine and CBD beverage.” Wineries, being Federally and state-regulated, have been understandably reluctant to jump into the cannabis industry (though there are exceptions), both with non-hemp cannabis due to the Controlled Substances Act, as well as CBD-infused products due to the FDA not yet providing guidance on the use of CBD in beverages. It is my personal opinion, however, that, if the FDA does permit the use of hemp-based CBD in beverages, wine companies will make quick work getting hemp-based CBD-infused wines to market (likely dealcoholized to start), if the recent race to market for other CBD-infused products is any guide.

Wine and cannabis may or may not always mix, but it seems that there is opportunity for partnership and growth as complementary products.


cannabis, cbd

Latest Insights