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The Journey Toward Cannabis Appellations & Why It’s So Important

First wine, now cannabis. As Richard Mendelson, author of “Appellation Napa Valley” has noted, appellations apply to many things, but wine has been a focus point as it has been long standing in both the old world (Europe) and new (United States) – with lessons that apply to cannabis.  Still, appellations may be named based on regional identifiers such as surrounding roads, waterways, soil or tundra type, or even school districts, and can be in no way misleading to consumers.

For background, here in California establishing a cannabis appellation system became a law in October 2019, signed by Governor Newsom. Just as with wine appellations, Senate Bill 185 will expand already existing protections concerning “county of origin” labeling to include “appellations of origin.”

The wine industry has traditionally defined appellations to specific regions where grapes are grown and processed. In the United States, there are 245 American Viticultural Areas (AVAs) or individual appellations across 32 states, and California has the majority with 139 individual AVAs. You may be familiar with well known appellations in Sonoma County such as Carneros, Alexander Valley, Dry Creek, Russian River Valley, and one of the most recent appellations to be defined, the Petaluma Gap region.

The “what” behind the cannabis appellations is now being defined, and we encourage all cultivators, business owners and consumers that may benefit to participate in the process by educating yourself on the Cannabis Appellations Program. Others have already provided comments on proposed regulations, of which you can find a great legal breakdown on Omar Figueroa’s blog here.

Why does an appellation designation matter?

Cannabis, or otherwise, most of us want to know what we are consuming. Who is producing it? What is sourced from a craft product vs big agriculture? What are the ingredients? Was this plant sustainably farmed? Where is it from? Do the producers apply fair labor practices? This is especially true for those seeking a premium product -and in order to understand what you’re paying for. And rightfully so, the answers should be readily available.

The rise of conscious consumerism is a positive. It means consumers are voting with their dollars to buy ethically made products, often within their own communities, and now with Covid-19 revitalizing talks of renewed manufacturing and agriculture focus in the United States the appellation movement is critical to insure that the conscious cannabis consumer better understands their purchasing options.

Furthermore, with appellations not only could these questions be answered to educate and inform a consumer, but craft growers would then have a chance to stand out in the market – be it their notable farming region, growing practices, or their distinguishing soil characteristics – all of which help identify their product as premium cannabis.

The importance of product differentiation

Appellations will drive differentiation, and the implications for cannabis are perhaps far wider than for the wine industry. Wine is a drinkable for recreational purposes and while it is a very large market, the market applications for cannabis are far more vast.

The cannabis plant is rich with hundreds of cannabinoids, thousands of terpenes and flavonoids, and by all accounts, the medicinal and wellness promises of the plant are best delivered in a full-spectrum format. And yet, the vast majority of edibles and beverages today are infused with distillate, which is a highly potent THC oil and processed through an extraction means that purge all other cannabinoids and terpenes. Full spectrum oils should be more widely prevalent in consumables, and so the appellations movement will establish a transparent path for both flower products, as well as many other cannabis products like edibles, beverages, topicals, tinctures, and more.

More and more, people want to know where the product they are purchasing comes from, and in that understanding resonates the unique history and cultural application of its region. It also connects the consumer to the farm and the farmer – “Know your farmer” is a long-stated mantra for many and now “know your appellation” will also help. It will benefit both the small farmers, it will make exceptional products more easily identifiable, and it will boost surrounding industries as more formally defined tourism prospects develop in those regions.

Setting aside the legal hurdles towards claiming this reality, alongside grapes, almonds, dairy and many other agricultural commodities, California is the single largest global exporter of cannabis in the world. One of the big issues for the cannabis industry at large is that it lacks a consumer trade organization to cohesively voice the stigmas and educate consumers about the benefits of cannabis and hemp.

Building the appellation movement in California will not only give consumer direct awareness to cultivators and brands, but it will also bridge opportunities for other organizations to evolve.

Joyce Cenali

Joyce Cenali

Joyce Cenali is partner and COO of Big Rock Partners, a San Francisco-based strategic advisory firm focused on the intersection of cannabis, food and hospitality, serving both companies and investors. Joyce is an accomplished sales, operations, and business development executive with extensive experience in the cannabis industry.

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