Is Nevada fertile ground for the winery industry?

KJ Howe, a “professor of yeastology with Grape Expectations winemaking school, gives out samples of wine during the first St. George Day Spring Whiskey Barreling celebration at the Las Vegas Distillery in Henderson Saturday, April 25, 2015. St. George’s Day remembers Saint George, England’s patron saint. The distillery owner and his son are also named George.

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Participants are allowed to take their shoes off and jump right in at Pahrump Valley Winery's Grape Stomp Festival.

Acres of vineyards and quaint wineries probably don’t come to mind when most people think of Nevada. But that could change, thanks to a new state law allowing wineries in population hubs, such as Clark County.

In May, the Legislature passed and Gov. Brian Sandoval signed Assembly Bill 4 to help the winery industry grow. The law, which takes effect in October, will allow wineries to open in any Nevada county. The previous law, written in the 1980s, limited wineries to counties with fewer than 100,000 people, essentially prohibiting wineries in the Las Vegas Valley and in Washoe County, which includes Reno.

The new law will mean economic opportunities for both Southern Nevada and Northern Nevada, said Randi Thompson, a lobbyist for the Nevada Wine Coalition.

“We have the fewest wineries of any state,” Thompson said. “But Arizona has a $30 million wine industry, and we are right next door to California and below Oregon, so the sky’s the limit.”

One local business, Henderson’s Grape Expectations, is looking to capitalize. Operators of the winemaking school hope to open an on-site winery. General Manager Mike Schoenbaechler said the company has enough space at its warehouse and could buy grapes from growers.

“We are going to meet with some attorneys and just see how it all plays out,” Schoenbaechler said. “I would hope to know in the next couple of months. Then we can start moving forward with licensing.”

Grape Expectations helps wine enthusiasts make wine. The nine-month process takes students through each step, from harvesting to crushing to bottling.

“AB4 is very important to us because it allows us to have a tasting room and sell wine to someone who comes in,” said K.J. Howe, “a professor of yeastology” at Grape Expectations. “It allows us to have additional offerings to the public.”

Howe sees a potential ripple effect from wineries opening in Nevada, as the new law requires startup wineries to use 25 percent Nevada-grown grapes after selling the first 1,000 cases of wine each year.

“It’s good for the state because it will induce people to grow grapes,” Howe said.

Nevada’s four existing wineries don’t have to meet the quota for 10 years.

GROWING PAINS

Still, the new bill has detractors. Thompson said the original draft didn’t include a quota for state-grown grapes, nor did it limit new wineries to one tasting room, as the enacted bill does. Thompson worries about the impact the amendments will have on startups.

“I think it will discourage serious winemakers from starting wineries, at least for a while,” she said.

There is a dearth of vineyards in Nevada, Thompson said. Although initial grape crops can be grown in about a year, the first fully-mature crops typically take three to five years. Full vineyards can take as long as seven years to grow.

The Nevada Wine Coalition’s goal was to spark Nevada’s wine industry much sooner. But Pahrump Valley Winery owner Bill Loken and Sanders Family Winery owner Jack Sanders successfully lobbied for the 25 percent rule.

Loken said it was necessary to protect the state, otherwise large corporations could have set up wine bars, called them “wineries” and simply shipped in wine from other states.

“The Legislature, back in the late ’80s when they fashioned the (original) law, actually showed great wisdom,” Loken said. “They knew if this industry was going to ever happen, it would happen out in the rural areas. And they wanted to prevent the very thing we wanted to prevent, and that is to turn these two metropolitan areas into nothing but bottling plants for California wineries.”

Pahrump Valley Winery is the oldest Nevada winery. It serves tens of thousands of tourists each year from the Las Vegas Valley, Loken said.

The other wineries in Nevada are Sanders Family Winery in Pahrump; Tahoe Ridge Winery, which moved to Carson City from Minden in May; and Churchill Vineyards in Fallon.

Jack Sanders founded Pahrump Valley Winery in 1989 before selling it. Now, his Sanders Family Winery uses about 20 percent Nevada-grown grapes to produce about 6,000 cases of wine and serve about 40,000 visitors a year.

Sanders and other proponents say growing more grapes in Nevada — and thus supplying future wineries — will be a boon for the state. And grapes need much less water than, say, alfalfa to grow.

But UNLV economics professor Stephen Miller said increasing Nevada’s grape production could be tough. The director of UNLV’s Center for Business and Economic Research pointed out that most of Nevada’s land is owned by the federal government.

“The best use of land for grape growing would be land that is not cultivated now for anything else, but most of that is (Bureau of Land Management) land,” Miller said.

DISTRIBUTION OF WEALTH

For Tahoe Ridge Winery owner Tom King, the restriction on the number of tasting rooms is the biggest impediment to growth.

New wineries will be permitted to have only one on-site tasting room where they can sell their wine directly to the public without going through distributors. The existing Nevada wineries still can have two tasting rooms — one on site and a second at a remote location, such as a bistro in another county.

“There has been a bad sequence of state laws put into place since the Al Capone days,” King said. “The distributors make about three times what I make on a bottle of wine. And the wholesaler, like a liquor store, will also make about three times what I make.”

King said he would like to see a fairer system, such as allowing Nevada wineries to have four tasting rooms.

“This wouldn’t hurt the distributors, but it would help the wineries a lot,” he said.

Thompson doesn’t rule out going back to the Legislature in 2017 for more changes to the law. In the meantime, she and others in the wine industry say they’ll look forward to more immediate industry shifts.

“I support the changes to the wine industry,” King said. “And I am for breaking down the barriers to having wineries in Las Vegas and Reno.”

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