(Fortune) - The U.S. wine industry is poised for another banner year in 2017. Sales are projected to rise by as much as 6% and the total harvest in California—by far the largest wine-producing state—should climb 7% to nearly 4 million tons crushed. The coveted millennial generation is increasingly paying more attention to wines.

Those trends all imply that the wine industry is crushing it. Higher sales, mostly fueled by "premium" priced wines at $9 or higher, bode well for big producers like E&J Gallo Winery, The Wine Group and Constellation Brands(STZ, +0.22%).

But wine producers are increasingly focused on two lingering concerns that they worry can be problematic headwinds: Labor shortages during the harvest season and the threat of legalized marijuana as an alternative to wines. "Farm labor supply and costs will be the dominant concerns in the wine business in 2017," says Rob McMillan, who authored Silicon Valley Bank's annual "State of the Wine Industry" report.