Why California's New Cannabis Terroir Laws Are A Win For Legacy Growers

California's most iconic cannabis cultivation zones and its local outdoor growers recently received a boost to their business when Gov. Gavin Newsom signed SB 67 into law on Sept. 30.

The regulation amends Section 26063 of the Business and Professions Code while enacting a new terroir-based appellation for origin-specific products and its use of the environment during the plant's growth.

Any use of artificial lights, shelters or any other form of temperature or climate control is prohibited under the rules.

The passage of SB 67 is being heralded as a win for the state's iconic operators across California's fertile grounds, including the Emerald Triangle, by recognizing their claim to the fertile region.

Under SB 67, family farms and legacy operators are granted the right to claim, market and protect their regionally made products as craft cannabis continues to become a niche sector in the marketplace.

The decision is being likened to another lucrative California market — wine.

With the parallels in full view and legislation further connecting the two industries, SB 67 appears to be one step closer to market legitimacy for marijuana.

Related link: California Cannabis Farmers Look To Mimic The Region-Specific Labels Wine Makers Use

Benefitting California's Growers And Products

The passage of the law is the culmination of a long effort.

"We've been actively working on this since 2015 in terms of policy advocacy and community organizing, and it's incredible to see it get to this place," Genine Coleman, a grower and advocate for nearly 30 years and executive director of Origins Council, told L.A. Weekly.

Others in the industry are championing the law as well. Alec Dixon, co-founder of SC Labs, a cannabis and hemp testing company in California and Oregon, says the law will become a substantial win for key cultivation regions in the state.

"Not all cannabis is created equal," he told Benzinga.

SB 67 provides opportunities to all parts of the markets--including the unlicensed.

Oakland-based cannabis journalist and advocate Jimi Devine elaborated on the importance of the bill for the underground market.

The terroirs serve as a parachute for legacy operators that the state hopes to transition, Devine explained.

"As we try and convince them to come into the light, creating mechanisms to add value to their heritage is 100% the way to do it," he added. But the bar is still too high for legacy operators, suggesting that easing parameters could be beneficial.

"If the bar is adjusted to give more people a shot, the lower they set it, the more people the terroir program impacts," Devine said.

The California Cannabis-Wine Parallels

Aaron Keefer, a long-time Napa resident and VP of cultivation and production at Sonoma Hills Farm, feels that SB 67 is the logical next step for a growing market aimed at producing high-quality cannabis.

Keefer, the former lead gardener at the three Michelin Star Napa-area restaurant, The French Laundry, said the law benefits consumers as well.

"It gives the power to choose where and how their cannabis was grown and, in turn, rewarding both the customer and the producer with the elevated experience that has transformed wine from a commodity to a regional treasure," he explained.

Keefer expanded on the parallels between California wine and cannabis, saying that American Viticultural Areas (AVAs) do the same for wine to ensure that customers know where their product is sourced.

"Is one better? That's a personal preference," he said. "But thanks to AVA labeling, the customer has the power to know where their grapes were sourced."

However, there are differences between the markets.

"While grapes are a perennial crop with roots that take decades to drive meters into the bedrock, cannabis is less influenced by underlying geologic formations, yet still highly dependent on its environment," Keefer said. 

Related links: Emerald Cup Founder Tim Blake Shares Advice From Years Of Trial And Error In The Cannabis Business

What's Next For California's (And America's) Cultivators

Sources overwhelmingly applauded the decision as a win for the industry and its growers in prime regions.

SC Labs' Dixon said the law would establish a system where farmers in the cleanest, most fertile regions of the state can thrive and succeed.

However, the passage of the law could hurt producers in lesser-regarded cultivation areas.

"In a state like California with such a significant agricultural footprint, those regions with a history of pesticide use and heavy metal contamination are going to pay the price," Dixon forecasted.

Meanwhile, Sonoma Hills' Keefer said the laws' implementation could send a ripple effect in other U.S. markets.

"As the largest cannabis market in the world, California is often a bellwether for other states," he said. "We plant the seeds and set the standards that allow other markets to grow."

 

Note: This article was updated to remove regulations that were incorrectly attributed to SB 67.