SB 67: Updates to the Cannabis Appellation Program

The specific location of a product's origin is more important with some products than others. Wine is the classic example, as the dirt and weather in which grapes are grown can have a profound effect on the nature of the end product. A designation such as "Russian River Valley" in Sonoma therefore does more than just stroke the vanity of the given region -- it protects customers expecting a product to have certain location-related qualities and characteristics. Thus, a regional appellation functions similarly to a trademark -- albeit one used by multiple different producers.

Cannabis cultivators have long argued that the growing region affects cannabis characteristics, and in a 2016 bill, the California Legislature directed the California Department of Food and Agriculture to establish a similar Cannabis Appellation Program, known as CAP, for cannabis growing regions in the state. CAP will allow regional groups of cannabis cultivators to apply for the establishment of a regional appellation that would identify the origin and source of their products, and to limit the use of that appellation to certain producers, whose products meet specific requirements. Such appellations will allow cannabis produced in well-known regions, such as Humboldt, to command a higher price than that grown in other areas.

SB 67 which went into effect on Sept. 30, 2020, updates the CAP in three important ways:

(1) It expands the definition of "geographic region" to allow more nuanced application. While the previous bill would only have allowed appellations based on county of origin, the updated law will allow cultivators to designate a county, city, or city and county of origin. As with prior versions of statute, the updated CAP only permits a cultivator to use a regional appellation if 100% of the cannabis in question is produced in the designated region.

(2) It prohibits cultivators from falsely promoting a cannabis product as being produced in a particular region, or from using any marketing or advertising that is likely to mislead consumers about the type or source of cannabis it contains.

(3) It expressly excludes from the CAP any cannabis products that are grown indoors (such as in a greenhouse), or using certain practices, such as the application of artificial light.

SB 67 requires the California Department of Food and Agriculture to finish developing the appellation process by Jan. 21, after which groups of cultivators may begin to apply for "appellations of origin." Cultivators interested in such an appellation should begin building coalitions, and working with their neighbors to plan their applications.