What does California cannabis marketing need? Lines on a map

How is cannabis grown in Alexander Valley different from cannabis flowers from Laguna de Santa Rosa?

And how can growers use those differences to their marketing advantage?

Those were the questions cannabis cultivators and business owners wrestled with, sometimes raucously, during a panel discussion on how cannabis appellations - a legally defined and protected geographical area that identifies where something, like wine, is made - should be established in California. Hosted by Sonoma County-based Elyon Cannabis, speakers at the event fielded questions on how the industry can band together to create appellations, highlighting unique traits in cannabis grown across Sonoma County.

State law already mandates that California create a process for cultivators to establish appellations by 2021. A recent state law, Senate Bill 185, championed by North Bay state Sen. Mike McGuire, D-Healdsburg, also establishes appellation protections for cannabis for the first time, according to McGuire’s office. “The opportunity SB 185 speaks to is that it will add economic value to the craft cultivators that are choosing to grow in the soil under the sun,” said Siobhan Brady, a hemp cultivator and member of the Sonoma County Hemp Advisory Committee. She added that establishing appellations would allow farmers to highlight sustainable farming practices and differentiate their products.

“What is grown in Alexander Valley is very different than what is being grown in Laguna de Santa Rosa,” Brady said, adding, “Unless we can identify the uniqueness of that flower coming from that region, it doesn’t really mean much.”

According to a fact sheet from the California Department of Food and Agriculture, the agency is taking public comment and establishing a process by which licensed cultivators can establish appellations “for standards, practices, and varietals applicable to cannabis grown in a certain geographic area in California.”

Another speaker, Genine Coleman, is the co-founder and executive director of the Mendocino Appellations Project. She said her group has been working with the CDFA with the goal of having a preliminary appellation application process in place and ready for public comment by the end of the year.

In theory, an appellation would “go before a review board under the purview of CDFA,” Coleman said. It would then be denied or approved and if approved would go on to be legally permitted to be used as an appellation of a region.

But before appellations can be useful in marketing product, you have to have product. And to grow product you need a cultivation license, according to Ron Ferraro, the CEO and owner of Elyon. “We barely have any permits, we barely have anyone growing,” Ferraro said, expressing his frustration at securing land use permits for essential structures like curing and drying buildings for producing cannabis. Still Ferraro said he is planting some seeds now without the intention of selling the product. He said solely growing to determine what varietals grow well in the Sonoma climate and in specific areas will go a long way towards establishing future appellations.

Establishing those lines on a map is also a long-term competitive necessity for those in the cannabis industry who expect the plant to be federally legal sometime in the future.

“Everybody knows about Napa Valley wines, Russian River pinot noir,” Brady, the hemp cultivator, said. “When the feds open up we’re going to be competing with states that have the ideal climates, like Texas,” she added. “By grasping onto something unique we have here ensures our future when we’re in a much more competitive environment.”

Coleman agreed, adding there are steps cultivators can take now under state law to bank on location as a selling point for cannabis. She said branding based on the already established, albeit less specific, county of origin designation can raise awareness of the unique qualities of Sonoma County grown cannabis for example.

A Mendocino County resident in the town of Comptche, Coleman suggested county of origin designations could be a gateway for consumers to associate certain types of cannabis with more specific locations once appellations are established.

“Folks nationally and internationally, they know Mendocino, they don’t know the town of Comptche,” she said.

While appellations like Champagne and Bordeaux have made those regions and their products famous, it is still up for debate if the cannabis industry should follow the exact same process for creating appellations ass the wine industry.

In a statement announcing the passage of SB 185, McGuire said, “Customers have come to expect truth in labeling in wine and this critical bill ensures manufacturers market products that meet similar appellation requirements with Cannabis.“ That raised questions that divided the voices in the room however, some of whom did not want the budding cannabis industry to follow the same path as winemakers in drawing up appellations.

“Perhaps we don’t want to mimic them,” Brady said of using a similar process to wine areas where smaller companies have organized under the name of a region promoted by a larger, more well-known producer. “That doesn’t really reflect the culture that we come from,” she added. “Multiple brands and recognition can come out of one region.”

Some growers in the room pushed back in the name of expediency and simplicity, suggesting smaller craft farmers can organize under appellations established by larger operators like Elyon or the Sparc brand.

That push for a speedy resolution may also be in part be because many small farmers have had to choose between being pushed out of business by the costly licensing and permitting process or returning to the black market. What’s more, the faster appellation protections are established the more protections smaller farmers have against the rapid production rates of larger, indoor facilities.

The plodding process of drawing lines on a map caused some cultivators at the meeting to express frustration at what they viewed as endless discussion without enough action.

“Let’s get a map out,” said one cannabis farmer named Dave from the audience during the question and answers session, a joint tucked behind his ear only partially obscured by his shoulder length hair.

Said Ferraro, chortling slightly, “I’m with you bro.”

Staff Writer Chase DiFeliciantonio covers technology, banking, law, accounting, and the cannabis industry. Reach him at chase.d@busjrnl.com or 707-521-4257.