California’s Cannabis Appellations Program – August 2022 Update

The California Department of Food and Agriculture (“CDFA”) announced that it intends to start accepting petitions for cannabis appellations of origin sometime during the remaining months of 2022. For reference and as noted on the CDFA’s Cannabis Appellations Program website, an appellation of origin is “a protected designation that identifies the geographical origin of a product and usually includes a production requirement.” 

Pursuant to California Code of Regulations, Title 3, Division 2, Chapter 2 (“CCR”), once the CDFA begins accepting petitions for cannabis appellations, a petitioning organization, which is a group of licensed cannabis cultivators representing three or more unique businesses within the geographical area of the proposed appellation of origin, may submit a petition to the CDFA to either (1) establish a new appellation of origin or (2) amend an existing appellation of origin. Since no cannabis appellations currently exist, the first wave of petitions submitted to the CDFA will be to establish new cannabis appellations. 

This publication details the petition requirements and processes associated with establishing a new appellation of origin. Amending existing appellations will be discussed in a future Rogoway Law Group publication. 

General Cannabis Appellation Petition and Fee Requirements

All cannabis appellation petitions must be submitted to the CDFA via mail along with a $2,850 petition submission fee. The CDFA will likely release forms that petitioning organizations must use when submitting a petition, however, such forms have not been released to the public as of this writing. However, prospective petitioning organizations can look to section 9102 of the CCR for details regarding what information they will be required to submit once the necessary forms are released. Required information includes, 

1. The names, DCC license number[s], and signatures of the individuals in the petitioning organization;
2. The name, DCC license number[s], primary contact phone number, email address, and preferred contact method for the petitioning organization’s designated contact person (the “petitioner”);
3. A general description and location of the proposed geographical area which may include information such as total acreage of the area, total canopy acreage within the area that is currently occupied under licensed commercial cannabis cultivation, and estimated cannabis canopy acreage eligible to use the proposed appellation of origin; 
4. Evidence of name use pursuant to section 9104 of the CCR;
5. A description and documentation of the boundary of the proposed appellation of origin pursuant to section 9105 of the CCR
6. A description and evidence of distinctive geographical features affecting cannabis produced in the boundary of the proposed appellation of origin pursuant to section 9106 of the CCR;
7. Identification and definition of all standard, practice, and cultivar requirements of the proposed appellation of origin pursuant to section 9107 of the CCR;
8. A description and evidence of the legacy, history, reputation, and economic importance of cannabis production in the area; 
9. If the proposed appellation of origin is located either partially or fully within the geographical area of another appellation of origin, an explanation of how the proposed appellation of origin is distinct from the existing appellation of origin; and 
10. Practice requirements described according to section 9107 of the CCR ensuring that the appellation of origin be applicable only to cannabis that is planted in the ground in the canopy area; cultivated without the use of structures including a greenhouse, hoop house, glasshouse, conservatory, hothouse, or any similar structure covering the plant or modifying the natural light received by the plant in the canopy area; and cultivated without any artificial light in the canopy area pursuant to Business and Professions Code section 26063, subdivision (c). 

Specific Cannabis Appellation Petition Requirement Details

While certain portions of the petition will likely be straightforward, some of the more technical aspects of the petition may require third party professional assistance to compile and therefore warrant further discussion. 

Evidence of Name Use

In this section of the cannabis appellation petition, the petitioning organization must describe the name and history of the proposed appellation of origin. This description should be in narrative form and must include at least the following information:

1. A detailed explanation of 
   1. how the name of the appellation has been used in the geographical area covered by the proposed appellation of origin and
   2. the relationship of the name and boundary of the proposed appellation of origin.
2. Evidence of the name usage described in item number one (1) above. Appropriate evidence of name use includes but is not limited to historical and modern government or commercial maps, books, newspapers, magazines, tourist and other promotional materials, local business or school names, and road names. All such evidence must conform to the following requirements:
   1. The evidence must be appropriately cross-referenced in the petition;
   2. The evidence must demonstrate the proposed name is directly associated with an area in which cannabis cultivation exists; and
   3. The evidence must come from sources independent of the petitioner/petitioning organization.

Maps and Boundary Description

In this section of the cannabis appellation petition, the petitioning organization must describe the area and boundary of the proposed appellation of origin. The description must include, at least, the following: 

1. The proposed boundary lines depicted on a United States Geological Survey topographical map(s). While the CDFA does not currently mandate the scale of such maps, it does require that the map(s) be of a scale large enough to show adequate geographical detail of the proposed boundary line. Additionally, the CDFA requires that the exact boundary of the appellation of origin be prominently and clearly drawn on the maps without obscuring the underlying features that define the boundary line. 
2. A detailed written narrative description of the proposed boundary. The description must have a specific beginning point, proceed unbroken from that point in a clockwise direction, and return to the beginning point to complete the boundary description. The proposed boundary descriptions may rely on any of the following map features:
   1. State, county, township, forest, and other political entity lines; except the boundary cannot be based solely on the political entity lines of a single county, city, or city and county; 
   2. Highways, roads (including unimproved roads), and trails; 
   3. Contour or elevation lines; 
   4. Natural geographical features, including rivers, streams, creeks, ridges, and marked elevation points (such as summits or benchmarks); 
   5. Human‐made features (such as bridges, buildings, windmills, or water tanks); and 
   6. Straight lines between marked intersections, human‐made features, or other map points. 

Geographical Features

In this section of the cannabis appellation petition, the petitioning organization shall provide:

1. A written narrative description of the distinctive geographical features affecting cannabis production in the proposed appellation. Examples of such distinctive geographical features include, but are not limited to, 
   1. Climate information which may include temperature, precipitation, wind, fog, solar orientation and radiation; 
   2. Geological information which may include underlying formations, landforms, and such geophysical events as earthquakes, eruptions, and major floods; 
   3. Soil features which may include microbiology and soil series or phases of a soil series; 
   4. Physical features which may include flat, hilly, or mountainous topography, geographical formations, bodies of water, watersheds, and irrigation resources; and 
   5. Minimum and maximum elevations; 
2. Evidence that the geographical area is distinctive when compared to areas outside the proposed appellation boundary and to the relevant areas which produce cannabis for sale into the marketplace;
3. A description of the quality or characteristics of the cannabis that are essentially or exclusively cause by one or more distinctive geographical feature(s). This description should include an explanation of how the distinctive geographical feature(s) cause(s) the cannabis to have the quality or characteristic; and
4. Identification of at least one specific standard, practice, or cultivar requirements which acts to preserve the causal link(s) between one or more distinctive geographical feature(s) and the cannabis, including
   1. a description of the mechanism by which the requirement preserves or maintains the causal link, and
   2. A clear distinction between cultivation methods which are allowed and prohibited under each requirement. 

Standard, Practice, and Cultivar Requirements

In this section of the appellation petition, the petitioning organization must identify and define at least one standard, one practice, and one cultivar production requirement for the proposed appellation of origin. 

Per section 9107 of the CCR, the standard, practice, and cultivar requirements identified by the petitioning organization will be reviewed by the CDFA for clarity. To satisfy the CDFA’s clarity requirement, the following conditions must be met: 

1. The standard, practice, and cultivar requirements must be reasonable and logical and cannot have more than one meaning;
2. The standard, practice, and cultivar requirements cannot conflict with one another, or any other information provided in the petition; 
3. The meaning of terms used in the standard, practice, and cultivar requirements must be generally familiar to other licensed cultivators;
4. The language used for the standard, practice, and cultivar requirements must be correct including grammar, punctuation, and spelling; 
5. The standard, practice, and cultivar requirements must be presented in a format that is readily understandable by the public; and 
6. Licensees must be able to understand the requirements necessary to qualify for use of the appellation of origin.

Additionally, each standard, practice, and cultivar requirement included in the petition must include a description of a mandatory mechanism by which compliance with the requirement will be documented. This mandatory mechanism must include record retention procedures that are compliant with Department of Cannabis Control regulations regarding record retention. Furthermore, all appellation compliance documentation must be thorough, organized, and appropriate to allow the CDFA to determine compliance with applicable sections of the CCR based solely upon a review of the records. 

Specific Requirements

In addition to the general clarity and documentation requirements noted above, the CCR also contains specific requirements for the standard, practice, and cultivar requirement information contained within any cannabis appellation of origin petition. Such requirements are discussed below.

Specific Standard Requirements (CCR 9107(b))

When drafting standard requirements to include in the petition, a petitioning organization must ensure that such requirements are either,

1. Composed of upper limits, lower limits, or accepted ranges of measurable or scorable characteristics, including measurement and variance tolerances; or
2. Program-level certifications granted by a certifier in good standing according to the certification owner; including but not limited to those associated with the CDFA’s comparable-to-organics certification program or certification marks registered with the United States Patent and Trademark Office (“USPTO”) and applicable to cannabis. 

Specific Practice Requirements (CCR 9107(c))

When drafting practice requirements to include in the petition, a petitioning organization must,

1. Include a description of the practice requirement that is drafted in such a way as to allow any licensed cultivator within the appellation of origin to comply without substantial additional research, and in plain language to provide clear understanding to the public; and 
2. Not use any terms that are likely to mislead consumers as to the practice or its implementation. 

Specific Cultivar Requirements (CCR 9107(d))

Cultivar requirements included in the petition may take one of the following forms:

1. A list of allowed and prohibited cultivar names, which may contain any number of entries including zero (0), or
2. Specific requirements including genetic testing, seed or plant specimen preservation, or cultivar identity certification with identified limits on acceptable methods, vendors, and practices. 

CDFA Petition Review Process

Upon receipt of a petition, the CDFA will notify the petitioner that it received the petition via e-mail. However, a petition will not be deemed “received” by the CDFA unless the petition submission fee is submitted, in full, with the petition. 

If, after reviewing the petition, the CDFA deems the petition incomplete or finds that additional information is required to determine if the petition is complete, the CDFA will notify the petitioner in writing of what information the petitioner needs to provide. If the requested information is not received by the CDFA within the prescribed timeframe, the petition will be deemed abandoned and will not be considered by the CDFA. 

However, if, after reviewing the petition, the CDFA deems the petition complete and accepts it for further review, the CDFA will send the petitioner a notice requesting payment of the petition proposal fee. The petition proposal fee is $14,250.

The petitioner will have 120 days from the date of the CDFA’s payment request to submit the payment to the CDFA. If the petitioner fails to pay the full petition proposal fee within the 120-day timeframe, the petition will be deemed abandoned and will no longer be considered or processed by the CDFA. 

If payment of the petition proposal fee is completed within the required timeline, the CDFA will issue a public notice of proposed action to establish a cannabis appellation of origin. The public will have 90 days from the date in the notice to provide comments and feedback on the petition. 

After the public comment period has concluded, the CDFA will review all submitted comments along with the petition documents and come to a decision regarding whether to establish or deny the petition. Once the CDFA has made its decision, it will provide notice of a final decision (a decision of “established” or “denied”) on its website and via e-mail to the following people:

1. The petitioner;
2. The designated responsible parties (“DRPs”) of licenses issued by the department and located within the areas directly impacted by the decision; and 
3. Stakeholders enrolled on the department’s Cannabis Appellations Program Mailing List. 

If the petition is denied, the notice of final decision will include all the reasons why the petition was denied. 

Reasons for Cannabis Appellations Petition Denial

As detailed in section 9203 of the CCR, the CDFA may deny a petition to establish a cannabis appellation of origin for the following reasons:

1. The petitioning organization has not submitted sufficient evidence to demonstrate the legacy, history, reputation, and economic importance of cannabis production in the proposed geographical area pursuant to section 9102(h) of the CCR; 
2. The petitioning organization has not submitted sufficient evidence to demonstrate that the proposed appellation name has been used in direct association with a cannabis production area pursuant to section 9104(b)(2)-(b)(4) of the CCR;
3. The petitioning organization has not submitted sufficient evidence to demonstrate that the proposed geographical area is distinctive with respect to the geographical features affecting cannabis pursuant to section 9106(b) of the CCR;
4. Proposed geographical features as described in the petition are not causally linked to the cannabis or the causal links are not maintained according to the standards set forth in section 9106(c) and (d) of the CCR; 
5. Proposed standard, practice, and cultivar requirements as described in the petition do not meet the clarity, form, or recordkeeping standards set forth in section 9107(a)-(e) of the CCR; 
6. Any other reasonable cause submitted through the public comment process that the department determines would preclude the appellation from being established or amended. 

The process of creating a petitioning organization and drafting a CAP petition, may seem overwhelming, however, the cannabis attorneys at Rogoway Law are here to help. For more information about the CDFA’s Cannabis Appellations Program or to start working on a CAP petition, contact Rogoway Law today.