In February of 2020, the California Department of Food & Agriculture (CDFA) issued its first iteration of the Cannabis Appellations Program (CAP), which set forth proposed regulations for licensed cannabis cultivators to establish appellations of origin. As the relevant market expands, such designations are likely to allow cannabis grown in well-known regions – like Humboldt County – to command a higher price than that grown elsewhere (much like wine grown in the Napa Valley). The CAP allows licensed cannabis cultivators in California to promote their product by designating the region from which they originated – using a protected designation similar to a geography-based trademark.
Governor Newsom recently signed California Senate Bill 67, which went into effect on September 30, 2020 and updated the CAP in three key ways.
- First, it expanded the definition of a geographic region to allow for more nuanced geographic designations. While the statute previously allowed the designation of a “county of origin,” the new bill allows the cultivators to designate a “county, city, or city and county of origin.” As with the prior versions of the statute, it only allows a cultivator to use a particular designation if 100 percent of the cannabis is produced within the designated region.
- Second, it prohibits a cannabis cultivator from falsely promoting a cannabis product as having been produced in a particular region, or from using any marketing or advertising that is likely to mislead consumers about the type of cannabis it contains.
- Finally, it expressly excludes from the appellation program those cannabis products that are grown indoors (such as in a greenhouse) or use certain practices such as the application of artificial light.
SB 67 required that the CDFA finish developing this process by no later than January 21, 2021. After that date, groups of cultivators seeking to establish an Appellation of Origin may submit a petition to the CDFA which contains a “general description and location of the proposed geographical area” that would be subject to the appellation. The description must contain a number of specific items, including:
(1) a description and evidence of distinctive geographical features that affect regional cannabis cultivation,
(2) an identification of the proposed appellation’s standard, practice, and cultivar requirements, and
(3) a description of cannabis cultivation in the region, including its “legacy, history, and economic importance.”
While implementation is still a few months out, cultivators interested in a regional appellation would be wise to begin planning now, along with other cultivators and stakeholders within their region, to define and prepare their petitions.