5 Key Highlights of the CDFA’s Proposed Cannabis Appellations Program

Farella Braun + Martel LLP

Farella Braun + Martel LLP

The California Department of Food & Agriculture (CDFA) recently released the first iteration of its Cannabis Appellations Program (CAP), which sets forth proposed regulations for licensed cultivators to establish appellations of origin (i.e., protected designations that identify the geographical origins of products and how those products were produced).  Here are the key highlights:

1. Petition Fees.  A $20,880 fee is required to submit a petition to establish an appellation of origin, and a $10,440 fee is required to amend an existing appellation.  The CDFA will not begin to review any petitions until these fees are paid in full.

2. Collaboration Among Businesses. Each petition must be completed by a group of licensed cultivators representing three (3) or more unique businesses within the proposed appellation of origin. This means that one business with three different licenses cannot file for a single petition. The proposed regulations put an emphasis on collaboration between different cannabis businesses because, according to the CDFA, greater consensus-building in a proposed cannabis appellation of origin is critical to avoid the establishment of appellations with overly specific or burdensome requirements in favor of any individual cultivator.

3. Contents of Petition. The proposed regulations set forth a vast amount of information, detailed in ten specific categories, that must be included in each petition.  Here is a sampling of the categories with more significant reporting requirements:

  • General description and location of proposed geographical area, which may include information such as total acreage of the area, total canopy acreage that is currently occupied under licensed commercial cultivation, estimated canopy acreage eligible to use proposed appellation of origin, and any other information to place the appellation in context.
  • Description of the boundary of the proposed appellation of origin and USGS topographical maps depicting the boundary.
  • Description of each distinctive geographical feature affecting cannabis cultivation in the area, including substantial evidence that the geographical area is distinct compared to other areas that produce cannabis, and identification of at least one specific standard, practice or cultivar requirement which acts to preserve the distinctiveness of the area.
  • Identification and definition of all standard, practice and cultivar requirements.
  • Description and evidence of the legacy, history and economic importance of cannabis cultivation in the area.
  • List of the cultivator license types issued by the CDFA (such as Indoor, Mixed-light Tier 1, Mixed-light Tier 2, or Outdoor), which are prohibited from using the appellation of origin.

4. Panel Review Process. Each completed petition will be reviewed by a seven-person Petition Review Panel, which will review and provide a recommendation on the petition to the CDFA.  Members of the Petition Review Panel are required to be California residents with relevant experience in cannabis cultivation, intellectual property, sustainable agriculture, or community-based research.

5. Notice of Use; Record-Keeping. A licensed cultivator is required to submit a “Notice of Use” to the CDFA within thirty (30) days of its use of its appellation of origin.  Thereafter, the licensed cultivators are required to maintain records for at least seven (7) years that demonstrate that cannabis was produced in the geographical area of the appellation of origin in accordance with applicable standards, practices and cultivar requirements.

The 45-day public comment period on the proposed CAP has officially begun.  Written comments are due on April 6, 2020, and a public hearing will be held in Sacramento on April 14, 2020.  Any individual or business with a vested interest is strongly encouraged to carefully review the proposed regulations and coordinate with their respective trade organizations to submit comments.

Cannabis Appellations Program: Proposed Regulations

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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