I am astounded how rapidly the marijuana industry is growing into a bona fide, full-fledged business. In fact, it’s starting to look a lot like the wine industry
My marijuana days—and they were many—happened when pot was illegal. You could get arrested for possession of a joint; I knew lots of people who were. We used to try and guess which would be legalized in the U.S. first, pot or gay marriage. I always figured it would be pot. I was wrong, but not by much.
California began the legalization process of medical marijuana back in 1996, but even today, marijuana is not completely legal, as gay marriage is. However, this November, California voters will probably pass the Control, Regulate and Tax Adult Use of Marijuana Initiative, provided it can get enough signatures to make it onto the ballot, which seems likely. And with billions of dollars at stake, entrepreneurs are lining up to grab their fair share of the profits from an industry that—like wine—offers ordinary people pleasurable respite from their daily toils.
The latest evidence of this is an email I got yesterday. It’s from a high-powered investor relations firm, IRP, with offices in L.A., New York, Miami and Hong Kong. The email (you can read it below) was a press release touting a new company, Kush Bottles, a California company (with whom I have no relationship whatsoever, in case you’re wondering) to help “ease the pain and eliminate the headache of entering this fast-growing, opportunistic market.” Kush “provi[des] cannabis companies across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law.”
What strikes me is how high-level all this activity is. Almost overnight, it seems, we’re talking about the stock market (IRP has a lot of NASDAQ clients, and Kush is listed over-the-counter), and a level of complexity to the pot market that requires wannabe players to hire expert advice. The tone of IRP’s press release is extraordinarily similar to the press releases I get everyday from wineries: professional, articulate, and crafted in the public relations jargon language we’ve come to expect from a press release.
The wine industry discovered years ago that if it wants to play in the Big Leagues, it has to do so with bigtime marketing savvy and media relations professionalism. The marijuana industry, now in its infancy, reminds me of Napa Valley wineries in the 1960s and 1970s, when they were owned by visionary but rather naïve people when it comes to business. Wine took decades to go Big Business. Pot took a couple of years, and the way it sells itself is changing overnight. The day of the mom-and-pop pot cultivator is over. Welcome to Big Pot.
Here’s the full text of the IRP email, if you’re interested.
My name is redacted and I am contacting you to arrange one of the first interviews with the CEO of Kush Bottles, Inc. (OTCQB: KSHB) – – a rapidly growing Southern California company that is helping entrepreneurs across the U.S. enter the rapidly growing cannabis industry. Nick Kovacevich, the CEO of Kush Bottles is traveling to New York this week and will be available for any live interviews.
Entrepreneurs all over the nation are eager to enter the legal cannabis market, which could approach $9 billion by the end of 2016, according to massive expansion projections in existing medical marijuana markets, which estimate as much as 99% growth. More states look to implement medical marijuana programs as doctors and researchers continue to uncover the medicinal benefits of cannabis. In addition to the growing medical industry, four states and the District of Columbia have approved recreational/adult-use programs, which further propel the expansion of legal cannabis nationwide.
Unfortunately, cannabis is still one of the most complex industries within the United States. As the laws evolve, new rules are put into place, making it difficult for cannabis businesses to keep up with the challenging regulations that govern legal marijuana. Growers and dispensaries must understand and carefully follow a multitude of laws that govern their business operations. Packaging, branding and labeling represent some of the biggest hurdles that a business must overcome. If any of those elements are mishandled, the business could be fined and/or shut down.
Kush Bottles, a California-based company, publicly-traded under the symbol “KSHB,” on the OTCQB, at approximately $1.35 per share, was founded in 2010 to ease the pain and eliminate the headache of entering this fast-growing, opportunistic market. This forward-thinking startup is a one-stop shop for any business looking to get going in the legal cannabis trade. Using its first-mover advantage, Kush Bottles is providing cannabis companies across the U.S. with market expertise, proper branding and high-quality packaging that satisfies the stringent requirements of the law – all without incurring massive legal fees. In addition to saving clients thousands of dollars in legal expenses by helping them navigate compliance hurdles, the company also allows their clients to bring in more sales by using proven branding and marketing techniques to help make their products stand out to consumers.
Offering high quality innovative packaging solutions while also providing clients with crucial regulatory insight is the magic formula behind Kush Bottles’ success. The company has proven its model by continuously growing revenues and posting net profits, which is rarely seen amongst other cannabis-related companies. Furthermore, as a result of using their regulatory knowledge to help cannabis entrepreneurs achieve compliance, they have built an expansive network of growers, processors, and retailers across the United States. With over 5000 returning customers to date, Kush Bottles is one of the largest suppliers of packaging and ancillary products for the legal cannabis industry.
We would like to offer you one of the first opportunities to interview Nick Kovacevich, the Company’s Co-Founder and CEO. Nick has tremendous insight into the challenges that face the legal cannabis industry. He is always excited to share his vision for helping entrepreneurs overcome these challenges and discuss how Kush Bottles has become the industry-leader in cannabis packaging and branding.
I can be reached via email at email@example.com or via phone at 818-280-6801.
Vice President, Media Relations
In law, the concept of “grandfathering” certain parties into new laws is quite old in America, dating back to post-Civil War days. It occurs, says Wikipedia, when “an old rule continues to apply to some existing situations while a new rule will apply to all future cases.” The concept applies across many areas of technology, law and sports. For example, the Green Bay Packers of the NFL are grandfathered out from a rule that prohibits corporate ownership of teams, because their corporate ownership dates to a time before the no-corporations rule was adopted.
When the U.S. and the European Union signed a trade deal, back in 2006, regarding American use of “geographic indications” on wine labels, the deal specified 16 “semi-generic” European place names that could no longer be used on American wines, including Burgundy, Madeira, Sherry, Port and Rhine.
However, under the deal’s terms, American wineries that were using these prohibited place names before March 10, 2006, were permitted to continue to be able to use them; they were grandfathered in. As the Department of the Treasury stated at that time, “If there is any question of eligibility for the ‘grandfather’ provision, we will rely on the information that appears in the ‘Brand Name’ and ‘Fanciful Name’ fields on the COLA that was approved before March 10, 2006.”
The deal had a ten-year time period; it expired this year, which led to the parties having to renegotiate it. Politico is reporting that, while both the U.S. government and the Napa Valley Vintners wish for a permanent ban on purloined place names, “the rest of the U.S. wine industry” is pushing to allow “American vintners to keep labeling their products with such regional designations as long as they were doing so before the agreement was struck.” This divide, between the Obama administration and Napa Valley Vintners, on the one hand, and “the rest” of the industry, on the other, “sets up a major showdown” between the U.S. and the E.U.
The Napa Valley Vintners offers a stark illustration of why they’re siding with the E.U. on this one: With the “Napa Valley” mark already appearing on at least one Chinese wine, “How can we go fight for our integrity around the world when the United States doesn’t offer that same reciprocation?” asks a NVV official.
Makes sense to me. I don’t see why we have to have phony European place names on American-made wines. These names may have had a useful purpose in the period after Prohibition, but they no longer do; they are useless anachronisms.
I’m sure that wineries that have used semi-generic places names for decades will have to go through a period of adjustment, if they’re no longer allowed to do so. But the actual wines won’t change, and consumers are smart enough to figure out how to deal with name changes. It’s called “a teaching moment” for the consumer, and you can’t have too many of those. Besides, the historian in me thinks that there will come a day when California (and America) no longer has any of these European place names on labels, and that will mark a significant tipping point in our maturation as a wine-drinking nation, as well as being a good partner to our European friends. And sometimes, in business, as in life, you have to take your friends’ feelings into consideration, even if it costs you a little.
Looking at the medal winners from the International Chardonnay Symposium, I’m struck by the geographic diversity of origins of the top-ranked California Chards. They range from Napa Valley down to the Santa Maria Valley, with Paso Robles, the Santa Lucia Highlands, Livermore Valley, Arroyo Seco, Sonoma Valley and the Russian River Valley inbetween. (I personally think you’d have to add Anderson Valley to the mix, although no Chardonnays from there were listed among the winners. Maybe there were no entrants.)
So from Mendocino to Santa Barbara for California’s best Chardonnays. That’s a big spread, about 375 miles. In France, we tend to think of the best Chardonnays as coming from a relatively narrow spread: Chablis down to Macon.* That’s a north-south distance of about 136 miles, but you’d obviously have to deduct most of the Cotes de Nuit from that, because it’s mainly Pinot Noir. So we have a Chardonnay terroir in coastal California that’s far bigger than the Chardonnay terroir of Burgundy.
Why is that? Examining California first, there is a true coastal terroir running along the Pacific Coast that’s obvious to anyone who regularly travels that route. Everybody knows the typical pattern: bone dry summers and autumns, warmish, sunny days and cool nights, as the maritime intrusion sweeps in dependably and bathes the land in fog. Yes, the soils differ. And yes, it is true that the further south you go the more of a change there is, especially in the quality of light. Cezanne would have loved painting the Santa Barbara mountains and coast. One senses it, also, in the softening of the air you feel as, driving from San Francisco, you hit Pismo Beach on any given summer day, then make your way southward down to Buellton. It feels different to us humans, so it must feel different to grapes, too.
But still, the terroir, in a macro way, is of one piece, and given the similarly of viticultural and enological practices nowadays, I doubt if anyone could tell the difference, on a consistent basis, between a Chardonnay from the Santa Maria Valley and one from, say, Carneros. Stones and minerals, green apples, tropical fruits, bright acidity, the usual impact of oak and lees and malo—this is why the coast makes such fine Chardonnay.
Perhaps the Chardonnay-growing area of France would be larger if it weren’t for the French system of appellation controllée, which is so much more rigid than ours. But it is what it is; the French system tends to favor a multiplicity of varieties. Ours—not molded by centuries of precedent, nor by Napoleonic law—is market-based; and the market being what it is, has resulted in only a handful of varieties, including Chardonnay, dominating vast regions.
It is a common notion nowadays that this system is changing. Led by sommeliers, responsive to a taste among younger consumers for the new and different, a new reality supposedly is emerging, of new varieties, tinkered with by a new generation of winemakers born in the waning decades of the 20th century, willing to venture where their fathers would or could not. This new paradigm—if that is not too strong a word—has much to recommend it, but it also faces stiff opposition. There is, for example, a Chardonnay Symposium in California, but not a Tannat or an Assyrtiko Symposium. One has to be careful predicting the future of anything, much less consumer preferences in foodstuffs; but we can allow History to be our guide. History tells us two things: First, what was popular, wine-wise, 100 years ago is popular today, and secondly, once a wine region becomes dominated by certain varieties, it tends to remain planted to those varieties. The two things are, of course, related.
But, you will object, younger people are turning away from the Chardonnays, Cabernets and Pinot Noirs, towards other varieties, said to be fresher, lower in alcohol, crisper and more interesting. Is this true? The media makes much of this meme. But is it more than just a story? Is it really a trend? The media loves trends, and has been known—shockingly!—to manufacture new ones for its own purposes. So, while I’m sure there will be new wines and new varietals that come and go, I’m equally sure that one grape variety—Chardonnay—will always be around. And I’m proud of my state of California for doing such a magnificent job with it.
* I suppose you could argue for extending the Chardonnay region south of Macon through the Beaujolais, but I wouldn’t go that far, either geographically or qualitatively.
When did all this talk about unicorns get so crazy? Suddenly, it’s unicorn this, unicorn that. Fifty-five million results on a Google search, of which this one, published earlier this year in Fortune, is most explanatory: “a unicorn is a private company, valued at $1 billion or more, and they’re seemingly everywhere, backed by a bull market and a new generation of disruptive technology.”
New, over-priced tech companies. Hmm. We’ve seen this before, haven’t we? Back in 2000 we called it the “dot-com bubble,” the catastrophic melt-down of a short era in which seemingly any company that ended with a dot-com enjoyed meteoric growth on the stock market. A good example was a startup called onsale.com. It was popular for a while after amazon.com got too expensive for most people to afford. I should know; I bought a bunch of onsale, and got slaughtered when it collapsed, along with all the other phantom dot-coms.
Now, the word “unicorn” is being applied to wineries. Wine Spectator picked up the term from Twitter back in 2013, quoting Raj Parr’s tweeted definition: “A [unicorn] wine that is ‘rare,’ ‘not seen much’ ‘special bottlings.’ Not always the most expensive but just hard to find.” By 2015, unicorn wines were all the rage in somm circles: the Wall Street Journal said “they confer[red] status not by cost but by the skill—or luck—it takes to acquire one.” Eater jumped into the fray, describing unicorn wines as “a new category of wine taking hold in Manhattan—the once in a lifetime bottles that every sommelier dreams of drinking, and bragging about, before they die.” Eater’s list was exclusive to Old Europe, mainly France. You would never find a California wine on a unicorn list, especially not in Manhattan.
Most recently, here’s Wine Spectator again, with Dr. Vinny asking the question, “What is a unicorn wine?” and pointing out that the opposite of unicorn wines are “first-growth Bordeauxs, or ‘cult’ California Cabernets.” Interesting. Not that long ago “cult California Cabernets” were the hottest wines in the world, coveted by everybody. Can it have been only eight years ago that the San Francisco Chronicle called Aubert, Ovid and Sloan “six cult wines to covet”? Today, you won’t find them on anyone’s unicorn list. They’re more like your great-grandfather’s wine than something the cool kids drink.
By the way, the hashtag #unicornwine still gets a lot of play on Twitter, although the category finally seems to be opening up to include California wine—as long, that is, as it fulfills the requirements of being rare and impossible to get. Someone tweeted a link to an Instagram post from “Mcvino82,” who posted this pic of an Inglenook 1978 Petite Sirah with the hashtags #unicornwine and (funnily) #whereisfreddame.
So a nearly 40-year old California Petite Sirah just might qualify as a unicorn. Story time: Years ago, I was on one of my first assignments for Wine Spectator, to interview a wealthy rock-and-roll lawyer who lived in the Hollywood Hills and was a bigtime wine collector. As I pulled into his driveway, a UPS truck was unloading case after case of Dominus, Dunn Howell Mountain, Opus One, Petrus, Tignanello—you get the idea. As we shook hands I tried to make small talk and said, “Man, I see you like the good stuff.”
He pointed with his chin to the stacks of cases on his driveway and said, “That? Nah, I hate it.”
Wow. “Then why do you buy it?” I asked, mentally doing a financial calculation of the cost.
“Look,” he explained, “those are what I call ‘pissing wines.’ You know how, when you’re kids, you have contests to see who can piss the furthest? Well, ___ and ___ [and here, he mentioned some real Hollywood heavyweights] invite me to their homes, and they serve Petrus ’66, so I have to invite them here and give them Petrus ’64.”
I took that in. Then I asked, “So, if you don’t like these wines, what do you like?”
“Ahh!” he grunted, grabbing me by the elbow. “Let me show you.” He led me to his backyard, where he’d dug a storage cellar into the hillside. Rummaging through the racks, he pulled out a bottle. It was a Petite Sirah from San Benito County whose producer, even on that day 25 years ago, was long defunct. “This is what I like!” he exulted.
“What do you like about it?” I asked.
“I like it,” he replied, “because no one else can get it!”
That was the rock-and-roll lawyer’s unicorn wine. So, you see, there’s nothing new about the concept, only the word. And while we’re on the topic of fantasy, it looks like Napa may be getting ready to allow marijuana dispensaries within the city limits. It’s far from a done deal, but I can see a time when upscale tasting rooms selling sips of unicorn wines will also offer unicorn weed to inhale, leading to the very real possibility that tourists emerging from these establishments, staggering down the street, may visualize actual unicorns.
Photo credit: goodmenproject.com
Jon Bonné, the San Francisco Chronicle’s former wine critic and, now, occasional columnist, has much to say about the demise of In Pursuit of Balance that is on point: that the organization was controversial, that it stimulated a valuable conversation over Pinot Noir style, that “it received a disproportionate amount of attention and media coverage,” that the ending, after five years, was “a shock” to the group’s members and fans, and—ultimately—that IPOB “served its purpose.”
Bonné can be a good reporter when he sticks to the facts and leaves aside his personal piques, but here, his dislike, verging on hatred, of larger wineries lends his analysis an off-putting hysteria. This is further fueled by his ongoing antagonism towards Big Critics, especially Wine Spectator, some of whose writers consistently raised legitimate questions about IPOB. Raising questions is the lifeblood and purpose of journalism—no reporter would be worth anything without raising questions–but Bonné calls it “savaging” IPOB, an odd but telling choice of verbiage. He goes on to accuse these Wine Spectator commentators (and, by extension, all of us who raised similar questions) of being “fearful of change.” That there is no evidence of such “fear” on the part of anyone who asked IPOB’s creators to more precisely define the “balance” that was their hallmark should be clear to all impartial observers. I myself asked, frequently, because IPOB never could iron out their internal contradiction, which was that they seemed to be suggesting that “balanced” Pinot Noir had to be below 14% in alcoholic strength, but even Raj Parr himself repeatedly had to backtrack from that assertion, for obvious reasons: It is on its face silly, and besides, there were members of IPOB whose wines were well in excess of 14%. Thus IPOB was forever hoisted on a petard of its own making, its “message” smudged into incoherence: If, indeed, they could not define “balance,” then what were they “in pursuit” of? IPOB’s inclusion of only certain wineries to their road show—the hottest ticket in London, L.A., Prowein, San Francisco or wherever else they poured–could only be seen as an arbitrary illustration of what has come to be known, in California circles, as the Cool Kids’ Club: We’ll invite our friends to the party. Don’t bother coming if you’re ugly.
I went to just about every IPOB tasting in San Francisco since the group’s founding in 2011, and yes, they were wonderful tastings. But they were wonderful not because they represented some sort of curated selection of the best and most balanced Pinot Noirs, but because they showcased many small producers whose wines most people—even I, as Wine Enthusiast’s senior California reviewer—didn’t have access to. I would have gone no matter who sponsored the event or what it was called; but the weight under which it was placed by that word “balance” cast a more lurid and ominous glow over the proceedings. One felt one was entering, not a mere arena for tasting, such as World of Pinot Noir, but a political convention, complete with party platform and ideological frisson, that just happened to feature wine. Since we knew that a cadre of insiders—including Jon Bonne—was responsible for the decision of what to include, out of all the bottles submitted for consideration, the implication was that all other Pinot Noirs were somehow unbalanced, an unsettling thought to a wine critic who might have given years of high scores to wines that, presumably, had been rejected by IPOB’s overseers. I should think James Laube and Matt Kramer felt quite the same: and why not? Thus to publicly air their concerns was not to “savage” In Pursuit of Balance. It was not to “savage” Raj Parr or Jasmine Hirsch or even Jon Bonne. It was to wonder, just as you might in a similar situation, why there was such a discrepancy between something you liked and something that IPOB appeared to find “unbalanced,” which, when you get right down to it, has to be seen as defamatory.
Not all of the kinds of wines IPOB loved, however, were good, and some were disasters. The 2011 Pinot Noir from Raj Parr’s Domaine de la Cote, which I tasted not at IPOB but at a World of Pinot Noir tasting, was among the worst Pinots I’ve ever had. In that cold vintage, Raj picked too early, motivated, I supposed, by ideology; the wines tasted like Listerine. (In fairness, his 2012s, which I tasted the next year at IPOB, were utterly magnificent.) This served to underscore what always was IPOB’s Achilles heel: its apparently slave-like devotion to a concept—low alcohol—at the expense of a far more important concept: deliciousness. Let the vintage tell you when to pick, not your frontal lobe. Incidentally, the limits, indeed the dangers, of sticking to this low-alcohol ideology were graphically illustrated at a World of Pinot Noir tasting some years ago when Siduri’s Adam Lee pulled a switcheroo on Raj Parr, at a public panel, an event Bonne alludes to in his opinion piece but whose implication he does not explore: that when you blind taste Pinot Noir without the ability to form a pre-conception due to knowledge of the alcohol level, you just might find yourself loving something you thought you were supposed to hate. Sic temper alcoholis.
But Jon is correct that IPOB “served its purpose,” if its purpose was to stimulate just the sort of discussion we’re having and have been having for some years. What had been esoterica has now become a standard part of the conversation about Pinot Noir, and for that we have to thank Raj and Jasmine. You have done the industry a service, monsieur et mademoiselle, and it is now time for you, and us, to move on.
“There’s nothing new under the sun.”
That’s from Ecclesiastes 1:9, which also says, “What has been will be again, what has been done will be done again.” One might have expected the Author of Authors to have taken the long view: not the next business quarter, but Eternity. So it is, or sometimes seems, for certain of us aging wine writers, who have seen and done just about everything—multiple times.
Now we have all this clamor about winery consolidation: Here’s an example, from Wines and Vines. The San Francisco Chronicle has another one, even calling the present era “buyout season.” And here is yet another, this one more specifically about Jackson Family Wines’ acquisition of Copain; the author, Dr. Vino, not surprisingly strikes a snide pose…but let us not digress from the formal point, which is that, yes, there has been a lot of buying activity lately on the West Coast, and not just JFW; Far Niente’s switch was big news. But the “nothing new under the sun” trope comes to mind because, when I first began writing about wine for professional publications, in the 1980s, the same thing was happening: much hand-wringing that all the little boutique wineries were being gobbled up. Every time there was a recession (1990-1991, the dot-com recession of the early 2000s, and certainly the Great Recession), the sky-is-falling prognosticators sounded the alarm: No more little wineries! But, somehow, family wineries remain in business—thankfully.
Face it, wine is a commercial product and thus subject to the business cycles and push-and-pull of capitalism. The average small family winery seems to have a life cycle: from startup to sale is, maybe, thirty years. And that makes sense. A guy or gal begins the winery in his or her twenties or thirties: thirty years later, he’s looking forward to Social Security, Medicare, and sleeping late, and may not have the physical capacity or the emotional temperament to continue the hard work of making and selling wine (especially if he’s also managing a vineyard). The kids may not want to continue in the family business. So what’s an aging winemaker/proprietor to do? Sell. It has always been that way and always will be. So there is no need to fret about this current wave of activity. It’s actually quite normal, and besides, I bet you that for every winery acquisition you read about in the news, five new family wineries are starting somewhere else in California or Oregon.
How many California wineries will make it to 100 years? Well, one or two already have: Beaulieu and Buena Vista, but they’re no longer owned by their founders. Inglenook planted their first grapes in 1871, but they’ve had multiple owners including, now, Mr. Coppola. Anyone else? Gallo’s going strong after 83 years; it’s likely they’ll hit the century mark. But compared to, say, Antinori (since 1385), California and Oregon wineries are just wee ‘uns. “What has been done will be done again.” Ain’t it the truth.