Why Wine Industry Insiders Embrace Cannabis As An Untapped Market: Craftsmanship And Tradition Redefined

The potential of a 360-degree marketing extravaganza combining cannabis and wine promises to captivate new audiences and create unprecedented brand experiences.

In an exclusive interview with Benzinga, Teddy Cabugos, president and director of Sunstone Winery, discussed the incorporation of cannabis into winemaking, unveiling their latest creation, Sunstone Spritz Sparkling, and providing compelling reasons for the wine industry to pay attention to cannabis.

Investing in the cannabis supply chain can bring strategic benefits, including unlocking untapped market segments, optimizing seasonal economies and leveraging existing infrastructure. This fusion of wine and cannabis holds the promise of financial success and pioneering innovation.

Craftsmanship, Tradition, Reach… and Revenue Streams

Cabugos, a fourth-generation Santa Barbara native, discussed how Sunstone built its brand identity on Santa Barbara’s. Known for its beaches, mountains, hiking, and restaurants, the county was awarded the wine region of the year 2021, recognizing the ability of locals to grow top-quality grapes and compete with renowned wine regions worldwide.

Identifying the similarities between the agricultural aspects of winemaking and cannabis cultivation, he perceived potential in merging his passion for cannabis with the realm of winemaking, emphasizing the significance of crafting an extraordinary customer experience.

Sunstone Winery is engaged in several key aspects to establish a successful business model.

The firm aims to establish a reputable presence in the cannabis industry while respecting the traditions and capital of the region, prioritizing these principles:

• Emphasis on geographical region and location in a renowned winemaking area.
• Recognition of challenges in introducing cannabis in a wine-focused region and engaging in conversations with authorities, neighbors, and community members.
• Focus on branding and audience engagement to cultivate a loyal consumer base and create a strong community of users.
• Direct-to-consumer approach, prioritizing quality, consistency, and fulfilling promises to consumers.

Challenges And Opportunities

Leveraging his background as a former entertainment industry professional, Cabugos stressed the challenges of building a brand in the federally illegal and heavily regulated world of cannabis, while highlighting the importance of storytelling and experiences to create a connection with consumers in an evolving industry.

Sunstone Winery harnesses the cultural heritage, historical significance and captivating narrative of its location.

Drawing inspiration from the customer experience standards set by the hotel industry and the meticulous attention to detail, segmentation, and education found in the food and wine industry, the company aims to establish a business narrative that seamlessly combines a hotel-like customer experience with enriching educational components.

The winery places great emphasis on its team members, who serve as dedicated ambassadors, imbued with a sense of ownership and fully immersed in the cherished wine culture that has thrived in the region for generations.

“You need a team who genuinely cares about your mission, vision, and product. They must be passionate about selling and take pride in the quality. Personally, I couldn't endorse mediocrity or uncertainty about the origin of the grapes or the cannabis,” Cabugo said.

Combining Cannabis And Wine

Combining cannabis and wine offers economic complementarity and strategic advantages, as wineries leverage existing infrastructure, tap into shared market segments, embrace appellations of origin, and captivate discerning consumers seeking premium experiences.

This also allows for diversification and optimization of revenue streams, ensuring stability and growth due to their seasonal nature.

Meanwhile, the established platform of the wine industry provides vintners with a significant advantage in developing and launching cannabis-infused products.

This opens up vast vast branding possibilities that appeal to discerning consumers seeking premium experiences by leveraging the allure of natural substances.

The potential to harness appellations of origin for both wine and cannabis adds exclusivity and market distinction, allowing for the creation of powerful narratives that resonate with consumers who appreciate a connection to the land.

Cabugos noted Sunstone has developed a well-structured model for introducing cannabis beverages, with a focus on maintaining direct relationships with establishments and ensuring exclusivity.

“We operate directly with consumers. Our membership, tasting room, and online sales are our primary channels. We don't engage in wholesale or rely heavily on distributors. If we do collaborate, it's a direct relationship with the establishment owner,” Cabugos said.

Sunstone Cannabis prioritizes transparency and quality, sourcing all products from known origins and utilizing a natural extraction method, while also aiming to educate consumers about cannabis, dispel misconceptions, and promote its potential health benefits.

Sunstone Splash: A Convenient Alternative To Alcohol

Cabugos envisions cannabis beverages as a socially acceptable alcohol alternative in the future, highlighting Sunstone's use of extracted components using ice and water, where cannabinoids are transformed into a water-soluble emulsion for seamless integration into any beverage.

This water-soluble solution, called "Sunstone Splash," is designed for people who may not want to consume the canned drink directly but prefer to add it to their own beverage like coffee, Gatorade or water.

He emphasized the convenience and discreetness of using cannabis-infused splashes, exemplifying scenarios like walking around Disneyland with a Gatorade infused with cannabis, and underscores this approach as a form of "consumer education" that will drive the acceptance and growth of the cannabis beverage industry.

“Imagine being at Disneyland with your kids all day. It's not socially acceptable to light up at a child's birthday party, but sipping on a cannabis beverage wouldn't raise any eyebrows,” Cabugos said. 

Global Reach

Sunstone, which has already integrated elements from various industries like food and beverage, hospitality and pharma, is working with organic food standards and is developing the necessary resources and capabilities for further ventures.

The brand could expand into hospitality or real estate by crafting developments that reflect its culture and emphasize collaboration with different organizations.

Cabugos, who revealed plans to establish their own kitchen and offer food within the next year, said he's open to expanding to other regions, mentioning potential opportunities in Uruguay.

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Photo Credits: Courtesy of Sunstone Cannabis and Sunstone Winery.