Governor Newsom recently signed SB 67 (aka: the Appellation of Origin bill) into law along with several other canna-related laws, including  a freeze on state-level taxes. Today? We’re looking at the impact that appellation of origin will have on licensed operators in the state and what you should know about how this impacts cannabis packaging compliance and marketing.

Appellation of origin makes packaging compliance more crucial

Recently we wrote about how cannabis packaging compliance is becoming more and more relevant and critical for licensed operators in the state. And just as new stipulations on the universal cannabis symbol last summer was “a thing,” passage of SB 67 reinforces the importance of packaging compliance. But SB 67 also affords protections to operators in specific cities and counties by way of clarification on appellation of origin. Let’s break it down.

• For starters, this bill goes deeper and gets more nuanced on appellation of origin designations. Specifically, operators are allowed to list in advertising or marketing of a product the city or county only if 100% of the cannabis was produced in that city or county. Ie: An operator cannot slap “Mendocino Grown!” on a product if the product was grown in Los Angeles.
• Similar to how operators shouldn’t label something “live resin” if it in fact is a distillate with terpenes re-added because it is misleading to consumers; operators need to understand that misleading consumers on where a product originates from is also not wise. Bill 67 makes this imperative clearer than ever before. Beyond cannabis regulations of packaging and labeling, operators need to be aware of (and comply with) all packaging and labeling requirement for consumer products, state and federal. This means everything from Weights and Measures regulations to the Fair Packaging and Label Act which does not take kindly to unfair, misleading and deceptive packaging and labeling.
• Another thing to note is that the appellation process is a way for cultivators to tell the story of the area where they are growing. There are a lot of very specific requirements to detail what the area is known for, how a specific geographical feature is “considered intrinsic to the identity or character of the area,” and how cultivation practices might reflect the distinctiveness of a given area.
• Conversely, operators need to understand this: Just as much as appellation of origin is a protection for operators in certain regions or places with unique characteristics –geography, microclimate, soil chemistry, etc.; appellation of origin designation is also a tool of compliance and enforcement against bad actors and misinformed operators alike who are mislabeling a product’s place of origin to the detriment of unwitting consumers that are prone to paying a premium for a unique strain from a “special place.”

Appellation of origin and OCal allow operators across California to differentiate

The clear winners with passage of 67 are the operators and growers in NorCal. For years operators in California’s northern reaches, the Emerald Triangle and elsewhere, have sought protections for the strains of cannabis that were unique to specific microclimates and soils. “Terroir” and “appellation of origin” are terms closely associated with the wine industry in California and elsewhere, and a lot of this is being borrowed from California’s vintners.

Northern California cannabis operators, with a hard-earned and historic reputation for unique strains, have a lot to gain from SB 67. But we also are very curious to see how operators in other markets such as LA, San Diego and elsewhere begin working with SB 67 to better promote their products.

For operators in any region of the state, “packaging” products with both appellation of origin designations and “OCal” certification could be an effective means to differentiation on dispensary shelves. After all, California consumers care about sourcing and wellness, and well, locally raised and organic cannabis counts for both, right?

One last thing to remember, despite the statehouse’s approval and Gov. Newsom’s likely signature, is that the definitions and the “how” of what will constitute “appellation of origin” by the California Department of Food and Agriculture is still being determined. CDFA has until January 1, 2021 to legally define what exactly will count as a protected geographic region of appellation.

Have questions about appellation of origin, OCal and cannabis packaging compliance impact your business?  Get in touch with MMLG today.