On Tuesday, September 29, California Gov. Gavin Newsom signed Senate Bill 67 into law, signaling that no later than January 1, 2021 the California Department of Food and Agriculture’s Cannabis Appellations Program will begin to accept petition applications from California growers to establish the first ever cannabis appellations of origin.
As California looks to establish its cannabis appellation program, our path will be defined by the parameters set not only by the wine AVA program, but also with an focus on the uniqueness of individual cannabis cultivators and producers, including:
- Grow environments. Cannabis is grown in three distinct environments: Indoor, Mixed-Light, and Outdoor. The debate as to whether the appellations should be all inclusive of the varied environments seemed to be a closed case, and appellations look to be relegated by sun-grown, outdoor cultivation practices relative to the native terroir and soil of the region or county, where an “appellation of origin is a protected designation that identifies the geographical origin of a product and how that product was produced.”
- Historic, location-specific cultural practices. Within a given area, farmers may have implemented certain practices to ensure the health of their cannabis crop, such as practices that deter wildlife and law enforcement.
- Regional strains. Elements such as soil composition, compost composition, humidity, moisture, bugs, pH balance in water, etc. vary in different regions, and cannabis strains perform differently in these varying environments. You’ll find that certain outdoor climates are more akin for the cultivation of specific strains, for example, strains that are more hardened to the effects of heavy moisture and fog, or those that thrive in areas with rich deep reservoirs that enable dry farming such the Eel River Valley and parts of west Sonoma County.
Appellation-driven cannabis tourism
Consumers and tourists alike will be drawn in by the program, so the appellation program will not only set up the prospect for identifying products on shelves, but it will also assist in the chipping away of tourism prohibition and start to re-integrate consumers into natural agricultural environments.
Outdoor cannabis cultivation tourism will have implications beyond just expanding cannabis consumerism; it will ideally lead to greater tourism demand for all kinds of sun-grown agriculture. Grape vines are usually segregated crops, while many cannabis farms apply permacultural practices and surround cannabis with other beneficial crops. Tourists visiting a cannabis farm in an appellation may be exposed to many crops, smells and sights, which should drive more emphasis to sustainable farming practices and awareness of other prevalent crops in the region.
For security reasons (even though grows are often required to have prison-grade security programs), regulations today prevent cannabis cultivators and manufacturers from listing their addresses or putting signage up at their locations. And so, the regions will have to figure out how to drive awareness, which will likely come through farmer’s market-style events in the short term, and will drive momentum towards true on-site tourism as the stigma dissipates.
Many individual cannabis companies to date have taken it on themselves to de-stigmatize and drive awareness by forwarding marketing campaigns, such as Acreage Holdings’ rejected Super Bowl ad, MedMen’s New Normal campaign and video produced by Spike Jonze, or Flow Kana’s “The California Way” campaign. There are many trade organizations focused on policy, criminal justice reform, and patients’ rights, but there is yet to be a defined trade organization focused on a broad and collective approach to educating consumers; such organization is pivotal for our industry. It’s both extremely costly for any singular company to shoulder this burden, and the marketing dollars born by any singular company are unlikely to drive consumers directly to their brand, but instead will serve to open the funnel more broadly for the entire market.
In other agriculture industries, there are many successful examples to point to that the cannabis industry can build from. The California Milk Processor Board, in order to drive consumer awareness to dairy farms, started the now infamous “Got Milk” campaign in 1993 which was later licensed for use by national milk processors and dairy farmers. And more recently, the California Milk Advisory Board launched the Real California Milk campaign with its tagline “Happy Cows Come from California,” and identifies its members with an easily identified seal.
Similarly, the California Avocado Association was founded in order to maximize grower returns by enhancing premium brand positioning for California avocados and improve grower sustainability, and recently launched the compelling campaign, The best avocados have California summer dreams in them. Other examples include the Almond Board of California, which launched the Growing Good campaign to accelerate orchard inclusion in the California Almond Sustainability Program which identifies its members with an easily identified seal.
Notice that all of the organizations above were born from California industry relations. As cannabis is in the process of becoming, and already is, legal in many states throughout the country, we have an opportunity to align a national trade organization. CA Gov. Newsom’s signing of SB 67 is a great start to solidifying California’s voice and lead in educating consumers far and wide. Just as consumers flock to Sonoma, Napa, Paso Robles, and other vineyard-rich regions in California, we can expect that cannabis appellations will drive significant audiences that will benefit California agriculture as a whole, and eventually will open the door to interstate commerce relations.
Why inter-state commerce ties to this and is so important
Can you imagine the best avocados being grown in New York? No, because the best avocados have California summer dreams in them. No other major agricultural product that California is known to produce is relegated to the California market alone. The appellation program has been directly tied to an agriculture crop (grapes and wine), and thus, solidifying the appellation program continues to forward the precedent that cannabis is in fact, another agricultural crop and thus should not be relegated to our state borders. It would be reasonable for the agriculture departments of California and Oregon for example, to define certain cohesive appellations in the Emerald Region along the border of Southern Oregon and Northern Humboldt. Appellations aren’t necessarily drawn across state lines – they are drawn across common climates, and so the argument for expanding borders is inherent in the solidification of the program.
Further, the sheer fact of the matter is that 80% of cannabis sold throughout our nation, and predominantly shipped to saturated markets like the Tristate area, comes from the Emerald Region of California and Oregon. Legislators and law enforcement can fight the unregulated market trends with all their might, but until we address that reality and regulate an import/export program that allows consumers to access the best sungrown cannabis our nation has to offer, we are not going to quell the unregulated market.
Our good friends with Sensible Markets and Craft Cannabis Alliance were able to get an export bill passed in Oregon, and signed by their Governor in 2018, and they are now pursuing their #StatesCan’tWait campaign which calls on governors of legal and soon-to-be-legal states to join an interstate compact to regulate commerce in legal cannabis between them, and to seek Congressional approval in 2021. Their concept is that the rich agriculture states of California and Oregon, which have the appropriate terroir and a long legacy of experienced farmers should be growing the majority of cannabis consumed across the nation, and that via treaty with other states, such as the Tristate area or states like Illinois and Massachusetts which since commencing legal sales, have been rationing flower as they cannot keep up with demand.
Just as these states cannot produce enough traditional produce to serve their populations and thus the majority is shipped in from California, these states will never be able to keep up with the demand for flower either. We should not force cannabis inside into costly and energy-intensive indoor facilities. We are seeing companies like Canopy Growth and Aurora closing its cultivation facilities in cold climates as costly and ill-advised examples. Let’s not make the same mistakes state by state, and instead deal with the reality of agriculture landscape and history. It is widely known that the drug war has predominantly affected both people of color in urban areas and also rural farmers in the hills of the Emerald Triangle – the opportunity of a treaty born export solution could translate into a legal supply chain partnership between those rural farmers and equivalent sellers in markets like New York, Brooklyn, and Chicago.
Just as wine is now accessible in all 50 states and available for shipping, cannabis should be too. We encourage all to visit and support #StatesCantWait and are hopeful that as new states legalize and political mindset opens, we will realize interstate commerce in 2021.
Neighboring cultivars in a given region will have to come together to name and define their regions, and so there will be comfort in community. One of the biggest detriments to growth for the legal industry in California is combating the unregulated market. If the program doesn’t present cost barriers, it will present a great opportunity for farmers to come into the light in the regulated market.
By Joyce Cenali, COO and Partner at Big Rock Partners. Prior to this bill being passed, Joyce initially penned her thoughts on why appellations matter in May 2020, in a story that appeared in Cannabis Business Executive.