California Cannabis Appellations Coming Soon!

There are so many ways to categorize the cannabis industry. Is the next frontier in pharmaceutical development? A giant case-study in the exercise of civil liberties? Or is it the largest-scale gardening project in history?

All of these are more or less true. But one of the most apt ways is to understand cannabis is by comparing with another agricultural project, one that depends almost entirely upon where it’s grown: Wine.

Appellations Coming to CA Cannabis 2Appellations Coming to CA Cannabis 2

Since at least biblical times, place names have been used to connote value to specific wines. And it’s not a hard sell: That’s why we shell out more for a first-growth Bordeaux than we do a cabernet from Sicily, or pay top-dollar for an Oregon pinot noir while leaving the one from Indiana sitting on the shelf. There’s a name for this system of place names: Appellations. They’re the legally defined and protected geographic areas where agricultural products such as wine are produced.

Now, the world’s largest cannabis market, California, is betting big on appellations for cannabis, too. Here’s the backstory, and what this move might mean for the state’s craft cannabis producers.

California Cannabis Appellations: The Backstory

As we pointed out a moment ago, appellations are nothing new. In Europe and elsewhere, they’ve been in unofficial use for centuries. The current French appellation system—the Appellation d’Origine Contrôlée—only came into being in the middle of the 20th century. In the cannabis world, there’s a roughly similar—and also totally unregulated—phenomenon: Cultivar names like “Maui Wowie” or “Afghani” typically denote the plant’s original place of origin, even though they rarely refer to the actual place the plants were grown.

But let’s stick with California. This fall, Governor Gavin Newsom signed Senate Bill 67 into law, thus initiating the state’s system of cannabis appellations. And in doing so, he put the cap on a years-long lobbying effort. Back in 2015, the Mendocino Appellations Project had begun the process by mapping Mendocino County’s micro-regions based on climate and soil characteristics. Then, last year, Senate Bill 185 created a system of official cannabis appellations, while it didn’t actually put them into use. Now, CalCannabis, a division of the California Department of Food & Agriculture (CDFA), is drafting a plan as to how the cannabis appellation system will work in the field. Advocates hope that these new appellation designations will be hitting dispensary shelves by 2022.

Appellations Coming to CA Cannabis 1Appellations Coming to CA Cannabis 1

Of course, California already had a blueprint to work off of: Its own wine regions, known in the United States as AVAs (American Viticultural Areas). But while California’s AVAs have given us famous (and top-dollar) labels such as Sonoma’s Alexander Valley and Napa’s Atlas Peak, that’s not to say everyone’s a fan.

One winemaker—Glen Ellen’s Tony Coturri—argues in a fiery editorial that many of the AVA definitions are meaningless marketing ploys. For one thing, he notes that winemakers can petition the federal government for variances and modifications to the AVA designations. “For every positive appellation change instigated by…winemakers championing a unique and worthy microclimate, there seems to be a dubious, commercially-driven one.”

He’s not alone. For those of us who believe that the Golden State’s stunning diversity of geography and climate plays a role in the quality of its agricultural products, the idea of reducing it to a mere marketing ploy is disquieting. But given the increasing dominance of large-scale cannabis cultivators, maybe the appellation law—because it’s designed to give small growers a leg up—is just what the doctor ordered.

Will Wine Marketing Work for Cannabis?

The growing role of mega-farmers is an underreported aspect of California’s cannabis boom. As Marijuana Business daily pointed out back in 2018, an increasing proportion of cannabis acreage is owned by a small number of licensees. Given that the industry was supposed to be a model for equity and inclusivity—both for people of color and for small businesspeople—it’s a disappointing state of affairs.

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That’s why the new cannabis appellations represent a glimmer of hope. By differentiating their products from those grown by mega-farms, smaller producers hope to increase their stake in the premium cannabis market. In an interview with the North Bay Business Journal, John Drayton of the California Cannabis Industry Association spelled out the group’s hopes for the legislation: “This is really an effort to help those small farmers in rural areas to make sure they’re competitive and make sure we have a diversified market here in California.”

Small-scale growers—typically those with under 10,000 acres in cultivation—are jumping on the opportunity. Many hope the state’s stamp of approval will help them market their products as premium offerings that benefit from a handmade, highly localized approach.

Others note that because the cannabis appellation system only recognizes outdoor-grown cannabis—a process that’s more climate-friendly and less energy-intensive than indoor growing—it allows these growers to market their products to the increasing share of consumers concerned about our environment.

Taking yet another page from the wine industry, some are hoping the popularity of wine tourism—in 2018, the Napa Valley hosted nearly 4 million visitors—can jump-start farm tours where cannabis fans can see where their favorite flower is grown.

Whatever the reason, it remains to be seen what impact California’s cannabis appellation will have on the market. But because we believe in the potential for cannabis to spark real social change, we’re hoping that this new—or, should we say, very old—acknowledgement of the role of terrain in agricultural products is a major boost to the small-scale, craft producers it’s meant to protect. As always, we’ll keep you updated as California cannabis appellations develop.

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