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California Wine Makers Worry Legal Marijuana Could Cut into Their Profits

Better wages and easier work make cannabis a lucrative business for vineyard workers.

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With tons of rain pouring onto Northern California, wine industry experts are predicting that 2017 will be a great year for American wine. Overall sales are expected to rise by 6%, and the total harvest in California may climb as much as 7% to nearly 4 million tons of grapes.

Despite this boost, wine producers are worried that the boom in legal marijuana could cut into their profits. Americans and Canadians spend an estimated $53.3 billion on marijuana annually, a sum that may increase as more states legalize, and wine producers worry that customers may allocate more of their income to weed than wine.

Last year, a report pointed out the possibility that cannabis sales were cutting into beer sales, especially for cheaper, domestic beers. Wine producers are concerned that lower-priced wines could see a similar downturn. Rob McMillan, author of Silicon Valley Bank's annual "State of the Wine Industry" report, said that “it is too soon to call” whether or not marijuana sales will hurt the wine industry. "People don't drink wine to get high, they smoke marijuana to get high. I don't think it will hurt demand."

One other concern facing the wine industry is labor shortages. California vineyards have typically relied on a steady flow of migrant labor from Mexico. The availability of this workforce has been dwindling over the past several years, and President Trump's immigration policies may only worsen the labor shortage.

The lack of vineyard workers may also be affected by the marijuana industry. The average vineyard harvesting wage is around $20 an hour, but marijuana growers often pay $25 to 30 an hour, in cash. With less paperwork and more money, a job in the marijuana industry sounds preferable to picking grapes, a factor which could decrease vineyards labor force even further.