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The Perfect Pairing: California’s Wine and Cannabis Industries Collide

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For any plant enthusiast, it’s a particularly romantic truth that the United States’ historic home of Cannabis cultivation also happens to be coterminous with its dominant wine-producing region. For fans of intoxicating substances, it’s downright exciting, not to mention convenient. And, for history and geography buffs, the fact that American weed and wine country not only significantly overlap with one another, but also got their starts in Northern California, is more than just a coincidence – it’s a testament to the special land both industries call home, as well as the industriousness and foresight of the people who brought them both to life.

In a perfect world, weed and wine are obvious bedfellows. They are both delicious and make people feel good. They come from the earth. And, for those who dare to think a little bit more about what they are putting into their bodies and why, both products evoke a legacy of taste and enjoyment that transcends just getting drunk or high – a lifestyle, some might say.

Unfortunately, the relationship between legal weed and wine hasn’t always been friendly up until now. In Sonoma, Napa, and Santa Barbara counties, fierce wars are being waged between Cannabis cultivators and wine producers, the latter of whom argue that Cannabis cultivation damages their agriculture and sullies the upscale reputation of the wine industry. They’re also not keen on the smell, which they say lessens their quality of operations, especially as tourism is concerned. On their side are wealthy proprietors, who don’t want to live next door to a weed farm, legal or not. 

Those battles are currently being litigated in the public sphere via local governments and court cases. But there are brighter spots: In late 2020, a law was passed in California, State Bill 67, which allows the California Department of Food and Agriculture to begin administering an appellations program. It will determine geographic boundaries for Cannabis producing regions, the way such designations exist in wine. Many people in the wine world were instrumental in helping Cannabis industry folks put that program, which is still in its infancy, together. They believe that strengthening an appellations system in one industry leads to an overall strengthening in the concept of geographically centered agriculture, which is ideal from both a farming and a marketing standpoint.

Some winemakers are taking it a step further, either by fully advocating for Cannabis cultivation in their wine-producing proverbial backyards, or by getting into weed growing themselves. 

Sunstone Winery Owner Teddy Cabugos at their Santa Barbara County property. (Photo courtesy of Sunstone Winery).

Teddy Cabugos, who owns Sunstone Winery in Santa Barbara County’s Santa Ynez Valley, is doing both. In a notable judgment, his winery applied for a land-use permit to grow Cannabis at the vineyard’s estate, which would mean grapes intended for winemaking and weed are grown on the same property. This is strictly verboten just about everywhere else, especially in California. 

After a lot of back and forth with local governments and agencies, as well as his well-heeled wine cultivating neighbors, Cabugos was able to reach an agreement. In May 2021, Sunstone was approved for the permit to plant up to six and a half acres. It’s the first time such a permit has been granted in Santa Barbara County and it represents a significant step in pairing wine with weed, pun fully intended.

“Sunstone is in a neighborhood with very wealthy people, most of whom don’t want Cannabis,” he says. “I had to work against seven appellates, very high-profile people, and for a year I had to work with them to dwindle down my project to something ‘respectful,’” adding that he understands he’s the newcomer to the neighborhood – having bought the property in 2019, though he’s a fourth-generation Santa Barbara resident. He respects that not everyone was initially on board with his plans to grow weed, and thus was willing to compromise. 

Cabugos says he and his wife bought the property with Cannabis cultivation in mind from the start. “I think the wine industry missed a huge opportunity in Santa Barbara County for filing for their permits, because they have the most beautiful properties,” he says. “They already have brand names. They already have the public coming onto their properties to buy their goods. That can catapult their entry into Cannabis,” he says, recognizing the value of an established brand – something many legal Cannabis brands are sorely lacking due to prohibition.

Stephanie Honig of Honig Vineyard & Winery in the Napa Valley, helped found the Napa Valley Association. (Photo courtesy of Devin Cruz).

Cabugos is not alone in thinking the wine industry has severely missed the mark. Stephanie Honig of the Napa Valley estate Honig Vineyard & Winery is not interested in cultivating Cannabis, but she is steadfast in fighting for cultivators’ rights to do so in Napa County, advocating for it in public and private and helping to found the Napa Valley Cannabis Association. Currently, Cannabis cultivation is banned in the county.

The association is largely responsible for keeping the issue of cultivation at the county’s forefront, which has been no small task in the Covid era, seeing as many of these ballot initiatives and ordinances require in-person signature gathering. So, an official county ordinance is currently tabled until it’s safer and more possible to move it forward, Covid-willing. In the meantime, Honig says that she and her team are more focused on education until the next time they can vote on it. They are shooting for 2024 to ensure as high of voter turnout as possible, which they don’t think is likely for a 2022 election.

“There are a few reasons why I’m a believer in [Cannabis cultivation] in this county,” Honig says. “Everybody knows that a monoculture is not good for the environment, nor is it good from an economic standpoint,” she says of the dominant cash crop for the region, which is obviously grapes.

“Especially with these fires we have been experiencing, nobody wants just one crop. The other piece is with marketing – Napa produces only four percent of the wine made in the state of California. But it generates over a third of the value of California’s wine industry, monetarily speaking. So, it’s really the top of the pyramid when looking at quality and quantity, because it’s the premium end of the market, right? Price, quality, and a small amount,” she explains. 

To Honig, the wine industry is so focused on the high-end older consumers, which keep the industry afloat for now from both a retail and tourism perspective. But they have a “Millennial and Gen Z problem” that she thinks Cannabis can help, saying that no longer are people wanting “just” a wine vacation. They are going to want to mix it with Cannabis, distillery visits and brewery stops, in addition to world-class farm-centric cuisine and beautiful views.

Honig’s idea is that, ideally, Cannabis cultivators in Napa would mimic the wine model with weed. “If we can even grow one or two percent of the Cannabis that is grown in the state with the Napa name, then we are really touching on that luxury market,” she says, noting that would-be growers have asked for only 100 acres out of the entire county. For context, grape growing takes up about 850,000 acres. She also notes they have made serious concessions in the process to get even this far, as Cannabis cultivation would be set back far from the main artery of the valley along the Silverado Trail. Instead, Cannabis cultivation would take place in the agricultural watershed, far away from most vineyards and certainly so from any tourist attractions. 

Nearby in Sonoma County, storied winemaker Mike Benziger of Benziger Family Winery is quietly growing legal weed at his GlenTucky Farm while making award-winning, certified organic and biodynamic wines at his estate winery.

Apart from championing Cannabis cultivation in wine country, Benziger was also involved in the creation of California’s appellations law, which requires sun-grown buds and prioritizes organic and biodynamic farming – his specialty and, in the opinion of the law’s architects, the only way to ensure land and geography has its rightful place in cultivation, and the marketing of weed that comes from a specific area. 

Sunstone Winery owner Teddy Cabugos says he and his wife bought the property with Cannabis cultivation in mind from the start.

To Benziger, the link between growing weed and grapes for wine is an obvious one. They’re both just plants, after all, and those who care for one crop or another, ultimately, are stewards of the land. That it falls on the same territory, only means more care in his view. 

“When we were creating appellations, we looked to France and their A.O.C. system,” Benziger says of the French system for creating geographic boundaries for winemaking, which includes best practices for farming and land management. “The French model for appellations takes a lot into consideration. It takes everything from the environment, to the soil, farming techniques, the mindset of the grower, and the politics of the area … it’s all part of creating the best product possible. Cannabis is a very expressive plant, so are grapes,” he says, indicating the level of care exhibited by Cannabis cultivators as they move further into winemaking territory.

Like with the planned cultivation in Napa, Benziger is required to grow on a separate parcel of land that in no way touches the wine part of his business, whether literally or figuratively speaking. Down in Santa Barbara County, Cabugos at Sunstone will have to do no such thing, thanks to his land use ordinance which allows him to grow weed in full view of his grapes, and vice versa. 

Cabugos, who is about to hire an estate grower for his new Cannabis venture, is also in possession of a somewhat hard to come by dispensary permit. He owns an off-site manufacturing and processing center as well. Ideally, he would like for the dispensary – and eventually a consumption area – to be on-site at the estate property. Both of those are not currently possible, so he said that the worst-case scenario is he holds onto the license for as long as that takes, and will utilize his local dispensary connections to sell whatever weed he grows. 

Either way, Sunstone Winery’s first Cannabis seeds will be planted next spring. It remains to be seen what, exactly, grows from that – but planting seeds is always the first step.

www.sunstonewinery.com | www.honigwine.com | www.benziger.com

Original Source: leafmagazines.com

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Cannabis poised to hit $200B by 2028

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SkyQuest Technology, a consulting business, has released a research estimating the present worth of the global cannabis market at $28.06 billion as of 2021 and projecting the industry’s growth up to $197.75 billion by 2028.

The “Global Cannabis Market” research divides the market into submarkets. Flower and concentrates are two distinct categories, while THC dominance, CBD predominance, and a balanced ratio of the two are others (which reviews North America, Europe, Asia Pacific, Latin America, Middle East, and Africa).

Recreational cannabis use is far more popular than medical due to its many reported health advantages, including relief from stress and depression and an uptick in energy and originality.

The report claims that the compound annual growth rate (CAGR) now sits at 32% annually as of 2021 due to the rapid growth of cannabis adoption. Until 2028, the CAGR is projected to rise to 35%.

The paper also discusses regional forecasts, noting that demand is anticipated to be strongest in North America. North America is the largest market for cannabis, according to the research. “The legalization of cannabis in most states in the US has generated a significant presence of providers,” it reads. Further, “the climate in North America is favorable for producing cannabis, and there is a great deal of area available for growth.”

North American consumers have a well-defined demographic profile: 55% are White, 20% are Latino, and 15% are Black. This information for the other regions was omitted from the report summary.

However, the report’s press release did note that the recent legalization of cannabis in some nations has prompted worries. There have been no research published on the possible health effects of cannabis usage, for instance, and the Thai Ministry of Public Health has not released any such studies, according to the announcement. Some have said that Thailand’s decision to legalize came “too much, too soon.” In Germany, people are expressing similar worries.

Several things seem to be driving demand. Medicinal cannabis is becoming more widely available as it undergoes decriminalization or legalization, and fresh studies continue to demonstrate the drug’s efficacy in treating a wide range of diseases. Additionally, the research discusses the emergence of the “cannabis lifestyle,” which has normalized cannabis use among “women, elders, parents, and others.”

For the cannabis market to continue growing, this analysis identifies improved banking services as one of the most pressing needs. “Financial institutions are a crucial growth area for the cannabis sector. Banks and other financial institutions have showed growing interest in cannabinoid-based enterprises in recent years, according to the paper. This is owing in no small part to the fact that cannabis businesses are typically in full compliance with monetary rules and guidelines. Because of this, cannabis firms now have access to a plethora of new opportunities for generating both capital and income.

According to SkyQuest Technology’s research of the cannabis market, the business’s prospects are bright right now. “The market is becoming increasingly competitive as the industry expands at a quick clip. Consequently, this is stimulating more competition and new ideas. More and more states are legalizing cannabis, and with that comes a surge in demand for both medical and recreational cannabis products, making the future of the sector look bright. Growth projections indicate that this sector will become one of the world’s most consequential in the next years.

Even though the cannabis market is always changing, most analysts expect it to keep growing. An estimate of $824 million was placed on the hemp market in February. Currently worth $17 billion, Forbes said in June that the cannabis tourism sector has the potential to grow much further in a post-pandemic world.

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The German Crossroads—Somewhere Between Los Angeles and Germany

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Of all the countries on the old continent, good old Germany is the one that is on the verge of a large-scale legalization of cannabis, which will significantly change the cannabis culture and will have to decide between two paths. Does it go the traditional way of the green Amsterdam school or does it follow the zeitgeist of the purple American-Californian philosophy in its then-new financially strong market? This editorial looks at the current situation in the economic powerhouse of the E.U., ventures a glimpse into the future and clarifies whether there might not be a third alternative path for Germany.

But before we can dare to look into the crystal ball and make predictions, we need to take a look at the current situation. An analysis of the current state before we can turn our attention to the target state. Germany does not have a national, recognized cannabis culture in the classical sense. Nor does Germany have any hotspots for cannabis culture, as Barcelona is for Spain or Copenhagen is for Denmark. While the judiciary in the south of the Federal Republic of Germany is still partly tough on small offenses, the police in other metropolises of the country are already wiser and in Berlin, Leipzig, Hamburg, or Cologne much more generous towards private cannabis users. Nevertheless, in the 16 years of Angela Merkel’s and the conservative CDU’s chancellorship, no sustainable cannabis culture has been able to develop. This does not mean that cannabis has not developed in Germany.

Since 2017, cannabis has been legally available for medical use. CBD products are everywhere and available at every second kiosk (bodega) and every Späti (the German’s favorite word for a small deli). Although the regulations are high you can find CBD flower everywhere, even the recognition factor has developed. The idea of a cannabis culture is in demand, even if THC is missing and cannabis containing THC still often has to be bought in parks around the corner or dubious areas. However, the current state of things also includes the fact that in the country of Bayer and BASF, a new branch of biochemical innovation has quietly emerged, which has already made financially strong experts in the industry such as Boris Jordan of Curaleaf become active. The great hunger in Germany for a social cultural embedding of cannabis and the German spirit of innovation in medical cannabis are two sides of the same coin, which could open up a path between green and purple fronts for Germany and, upon closer examination, make it a logical place for the further development of the worldwide cannabis culture. Clearly, the starting signal for legalization came from politics.

The new government elected in 2021 under the Social Democrats of Olaf Scholz has initiated a turning point. From a German perspective, this seems almost paradoxical, as Scholz took office promising to be the continuation and male version of Angela Merkel, who was known in U.S. circles as the so-called “Teflon chancellor.” So there is no point in looking at the current chancellor and his Social Democrats from the SPD on this issue, since he, like Merkel before him, does not let any issues stick to him. As a matter of fact, the focus has to be turned to the two parties that govern together with Scholz. The more left-wing Green Party Alliance 90/The Greens and the Free Democrats of the liberal party FDP. This government (SPD=red; FDP=yellow; Greens=green), known as the “traffic light coalition”, has defined in its coalition agreement that cannabis will be legally available in licensed specialized shops. The fact that three parties are governing in Germany is a novelty and had been expected with great excitement, as the last attempt at a three-party coalition had failed in the exploratory talks. The hype is real.

The legalization of cannabis had been on the agenda of the Green Party and liberal FDP for some time and was therefore an important unifying factor with media impact. The Greens were founded as a pacifist and alternative party and thus legalization was woven into the party’s DNA. The Liberals recognize the potential of a new market and trust in the individual’s personal responsibility in deciding for or against cannabis. They can also trust in the functions of a newly forming free market.

Despite all the justified criticism of capitalism, the example of cannabis shows some of the strengths of this economic system. The forces of a free market (with state framework conditions for all) set continuous improvement processes in motion, because companies want to set themselves apart from their competitors in terms of quality. Innovation, passion, and product understanding drive the industry to new heights. The customer and their needs must be understood and cannabis must be thought of in a holistic way in this new market. There must be full vertical integration without abusing the credibility of cannabis as a cultural property and allowing cannabis to degenerate as a profit-driven vehicle, as some German lobbyists are already trying to do. This is also a paradox, as some of them come from the CDU.

The best case of how to do it right is the company Boris Jordan invested in. Europe’s leading medical cannabis company—The Bloomwell Group. The Bloomwell Group, based in Frankfurt a. M., shows how cannabis in its dual function as a medicinal plant and cultural asset can work in a corporate context. The company houses three entities. Algea Care, which as the leading telemedicine company on German soil, stands for ensuring therapy and access to medical cannabis. Ilios Santé, the importer and trading arm, and the slumbering giant Breezy. The latter, through a cooperation in the near future, will enable the cashing of prescriptions for medical cannabis and position itself in the German market as the leading lifestyle brand in the cannabis space. Breezy will satisfy the hunger after legalization.

Germany’s sophisticated industry is already positioning itself as a global leader in medical use with cannabis in some areas, showing a clear case. The technical know-how and entrepreneurial spirit are there. The social desire for a credible cannabis culture is great and the political will for legalization is there. Breezy operates in a wonderful biotope where a thriving cannabis brand can manage to combine culture and technology.  In my column for the nationally-published startup magazine Business Punk, I wrote about “the respectful treatment of culture.” Cannabis is the unifying factor of several cultures that need to be embedded industrially and legislatively in a sensible way. It is important to take the different influences and communities with us. My work as a designer in the fashion industry has shown me that it is important to use synergies. First anchored in the niche and subculture, I launched my own streetwear collaboration with soccer team VfL Bochum 1848, a first division team of the Bundesliga. Bloomwell not only knows how to use synergies, but also how to create them.

In my role as VP of Marketing, I was able to win rap star and entertainment mogul Xatar as our first brand ambassador and partner. Germany offers high-growth investment opportunities in the coming years and it’s up to the cannabis enthusiasts from the beginning to pave the market with an emotionalized approach and help shape our common culture.

Maybe we’re gonna be talking about the German Blue strains soon? Who knows…

The post The German Crossroads—Somewhere Between Los Angeles and Germany appeared first on High Times.

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Sweetwaters the Core of Labat’s New Strategy as Group Unveils Plans to Set Up Commercial Seedbank, Expand Retail and Invest in Rolling Papers and Beverages

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Labat to focus on finding the right ‘business combinations’

Labat Africa is finally hoping to pull off its first-mover advantage in the cannabis value chain with a more aggressive strategy after the pounding of the pandemic and a lack of a clear regulatory framework.  The JSE-listed company has been burning through cash but is a going concern because of drawdown funding it has secured from Californian investors and its recent listing on the Frankfurt Stock Exchange.

The company gave an insight into its strategy when it revealed its latest financial statements to the public on 30 May 2022. Although the damage was bad, it’s not out of line with similar first-mover-advantage groups in all newly-regulated jurisdictions.

Labat’s strategy to seize the cannabis value chain in the course of the next 12 months is still being hampered by the restricted regulatory framework, but that looks set to change in the course of the year. Labat’s cannabis subisidaries fall into its healthcare division. They are: Labat Pharmaceuticals, Sweetwater Aquaponics, Ace Genetics, Labat Hemp Processing, Cannafrica and Biodata. Labat’s strategy going forward is to find the right “business combinations” to maximize efficiencies and get the Group purposefully heading towards profitability.

It says “the company’s vision remains to be the number one cannabis/hemp company in Africa and to maintain that position. The agreements over the last two years ensure that the company is on a profitable and value-creating path. Labat has made massive strides in laying the ground-work to becoming a Cannabis Powerhouse in Africa” It added that “Labat measures its success beyond yield and capacity; the pursuit of quality for a long-term competitive advantage drive to its business strategy”. 

Sweetwaters Aquaponics: a ‘quantum shift’ for the group

Labat says the acquisition of SAHPRA-licensed Eastern Cape facility, Sweetwaters Aquaponics on 1 March 202,2 led to a “quantum shift in the busines, enabling the export of product to overseas customers, with the initial initial customer in Australia ordering a second batch of flowers, following the successful testing of the THC content (26.7%) by SAHPRA. 

Ace Genetics: commercial seedbank to be set up this year

Ace Genetics is to be set up under license at Sweetwaters, a breeding room is under construction and a commercialization strategy is being put in place once the right genetics have been identified. The company says the planned date of transfer of all seeds and mother plants to Sweetwaters “is June 2022 with seed production expected to commence on the 1 August 2022 and the Company will be going to market with its own online Commercial Seedbank immediately thereafter. “

Echo Life deal gives Labat Exclusive Rights to Axle and Axle Pre-Rolls

Labat said last November’s acquisition of Miami-based Echo Life “greatly complements the Healthcare retail business through its unique range of product offering that will be marketed and sold through the CannAfrica retail stores as well as the Labat online retail platform”. In terms of the deal Labat will have the exclusive rights to distribute Echo Life’s pre-rolled hemp smokeable Ace and Axle as well as other products. 

CannAfrica introducing CannAfrica ‘Kiosk Model’ in 5 Shopping Malls

Labat has switched tack on the roll-out of its retail brand CannAfrica; it says the “main objective that underpins the new strategy is the aggressive rollout of corporate owned stores, some of which, will remain corporate-owned, and others, once profitable, to be migrated to franchisees, who are fully paid up in respect of franchise rights. 

The corporate-owned stores will take a different approach to the Melrose Arch, Hartbeespoort Dam and Cape Town stores which are larger stores with significantly higher operating costs. 

The ‘kiosk model’ is being implemented in malls and larger shopping centres and Labat is set to conclude a deal with the Company is at an advanced stage of concluding a deal with the Mowana Property Group to open up CannAfrica Kiosks in five of their prime properties namely: 

Cresta Shopping Centre (Gauteng), Westgate Mall (Gauteng), Menlyn Shopping Centre (Pretoria East), Castle Walk Mall (Pretoria) and the Pavilion (Westville). 

The five kiosks should be opened by the end of June 2022. 

Labat says it has identified that, “as an industry issue, there are no fully dedicated CBD stores operating in South Africa; therefore a considerable amount of time and effort has been put into further extending its product offering. The product lines which the company will be expanding into are minor/rare cannabinoids, vapes, grow kit accessories and other paraphernalia”. 

The Company also plans to turn the CannAfrica kiosks and retail stores  into “’dispensaries’ for the Biodata Research Project, for the legal dispensing of cannabis flower, other medicines and THC products.

Biodata Medicinal Cannabis to Become ‘Dispensary’ Product

Labat says the “Biodata research project is gaining traction” and plans to use the planned CannAfrica Kiosks as “physical-sign-up-points for the study”.  It says the kiosks will also serve as Biodata dispenseries for medical cannabis for pain management.  It says it is also “engaged with” a number of vape stores to also become Biodata “dispenseries” once regulatory approval is in place.

Rolling Papers into the Value Chain

Labat says it “is currently finalising agreements with a rolling paper specialist company that focuses on cannabis rolling paraphernalia. The business was running informally. However, there has been great traction on the brand and products with sales last year averaging 200 units per day. The business has now been improved structurally and has a focussed strategy of expanding into parts of Africa and the USA. The main challenge facing the targeted expansion Is the lack of working capital which approximates R500 000 for the first three months mainly for stock purchases to fulfil orders.  Labat has engaged the business partner around a possible share transaction as well as a bridging working capital facility over the first three months. The process is currently in the due diligence phase. For its year end March 2022, the company earned revenues of R1.8 million. These products are complementary products for the CannAfrica Stores. 

CBD Infused Drinks to Provide Ammo for Retail 

Labat came up with a new cannabis retail strategy in March 2022 to expand its national footprint and visibility and to increase product offerings,. It believes “a retail beverage offering is indispensable”. 

It says in an Enterprise Development initiative in 2020, Labat was introduced to a start-up cannabis beverages company which it still in equity negotiations with. However, “the company has developed three recipes in collaboration with the CSIR, and have finalised their packaging and branding architecture, and have delivered a premium product, as sample drinks. The product is superior, and of a quality that Labat want to be associated with. The company will now do their first production run, in order to show capability and test the market. A draft Term Sheet in place, to be concluded in the next phase of the Company’s deliberations. It is envisaged to be a share-based deal, for 30% equity, and access to evolving retail distribution channels.”

SAMES to be the Tech Hub

The South African Micro Electronic-Systems Proprietary Limited (“SAMES”) will “remain a technology hub and will also hold the healthcare divisions intellectual property, formulations, ‘know-how’, seed banks, extraction technology, strain development and other technologies needed in complying with Good Manufacturing Practice (“GMP”) standards, including European Union GMP, where applicable”. It says that although SAMES had a healthy start to the year, revenues have decreased “mainly as a result of a worldwide shortage of semi-conductor chips”

 Logistics business to take care of transportation and warehousing 

Labat’s Logistics, although not directly part of the Healthcare division, “will form an integral part of the Healthcare operations with both transportation and warehousing of raw material as well as final products. These are explicit requirements in respect of the GMP accreditation. Furthermore, the final product of the pharma business is expected to sell for between R800 and R1 000 for a 20ml bottle, which will need to be securely transported. The company’s marketing efforts are showing acceptable results and Labat is well positioned for growth based on work completed over the past three years. The Company continues to provide logistic services to large corporates, when and as required.”

Read all Cannabiz Africa coverage of Labat here

The post Sweetwaters the Core of Labat’s New Strategy as Group Unveils Plans to Set Up Commercial Seedbank, Expand Retail and Invest in Rolling Papers and Beverages appeared first on Cannabiz Africa.

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