There’s a great deal of talk in wine and spirits circles about the impact that cannabis legalization will have on the industry. I dealt with it slightly in my Washington Post piece about the non-alcoholic movement. But today, cannabis journalist Jackie Bryant goes deeper and brings us a report on California’s initiative to create cannabis appellations, similar to those for wine. It’s a high-stakes issue, pitting smaller legacy growers versus corporate interests — a scenario winemakers around the world know well.

In September 2020, California Governor Gavin Newsom signed Senate Bill 67 into law, which set the stage for the California Department of Food and Agriculture’s (CDFA) Cannabis Appellations Program. Once the program begins to accept petitions, it will establish the world’s first cannabis appellations. 

It’s a whirlwind of change for an industry that, until just a few years ago, was mostly illegal in the United States. In the eyes of the federal government, cannabis is still a Schedule I narcotic, the same category as LSD and ecstasy. There is legislation coursing through the federal government at present, but it’s unclear if it will come to fruition any time soon.

For cannabis growers in California, creating appellations has been a dream. Ask any grower in Northern California’s Emerald Triangle, composed of Mendocino, Humboldt, and Trinity counties and other mostly rural cannabis-producing areas in its vicinity, and they’ll say that their cannabis is special. It’s from somewhere, and that’s what makes it unique. This region of California is a historic home of cannabis cultivation in the United States, so it’s easy to see why it needs to be protected.

Already, smaller growers in the Emerald Triangle and the surrounding areas are losing a foothold in the market. Many are legacy growers that cannot afford the exorbitant permitting fees and taxes mandated by Proposition 64, which legalized adult-use cannabis cultivation and distribution in 2016. (In the cannabis industry, “legacy” is considered a compassionate and accurate term for those who grew and distributed the product before it became legal.)

According to many of those legacy growers, onerous taxation and regulation, a still-strong illegal cannabis economy, and the entry of big money into the state’s ecosystem have coupled with stalled efforts to implement interstate commerce and federal legalization to create an industry-wide crunch felt at all levels of the supply chain. There have been historic price crashes, significant crop oversupply, and many small growers and operators have been forced out of business from recent industry consolidation. Many of the larger companies who have moved in with deeper pockets utilize indoor growing facilities — which are explicitly disqualifying in the CDFA Cannabis Appellations Program.

An appellations system could, then, give those smaller businesses a leg up. It would honor their history, heritage, and the places they come from while placing a distinct value marker on the sun-grown cannabis that is produced there. That a successful appellations project hinges on producing high-quality products only makes it more attractive to growers and consumers alike.

“A lot of different factors went into defining what an appellation is,” says Mike Benziger, a legendary Sonoma county vintner and, in recent years, cannabis cultivator. “In a lot of cases, it goes beyond just the soil, the environment. It includes farming techniques and some political things, as well.”  

Until recently, it’s been mostly cannabis enthusiasts dealing in hearsay as to what factors make the best product. But thanks to an intrepid group of growers and an unlikely ally, California’s wine industry, a process to identify quality cannabis according to where it’s grown is finally being formalized.

The wine industry became involved about three years ago, says Rex Stults, vice president of industry relations for the Napa Valley Vintners (NVV) association. “It was all done by shuttle diplomacy,” he says. “It was a connection facilitated by our lawyer to Genine Coleman, director of the Origins Council, and myself.” 

It’s next to impossible to discuss cannabis appellations without Coleman’s name popping up. She founded the Origins Council, a nonprofit education, research and advocacy organization dedicated to driving sustainable rural economic development within cannabis-producing regions. Coleman cultivated cannabis for more than 20 years before she moved into patient and policy advocacy, her focus for the past seven years. Origins Council is also the ring leader of the project to develop appellations.

Stults says he meets with Coleman about four times a year to provide updates. He explains that NVV had several specific goals.

First, the American Viticultural Area (AVA) system and the Alcohol Tobacco Tax & Trade Bureau (TTB) wanted to make sure any cannabis appellation system doesn’t diminish wine’s appellation system. “We don’t want it to take away from what has worked in the wine industry,” says Stults. Second, NVV had concerns about “what was going on and how it might impact the Napa Valley name,” he says. 

The vintners group had been hostile to cannabis cultivation within Napa Valley. It maintained that key factors of cannabis cultivation, like security alarms and bright lights at night, harm the region’s lucrative tourist industry. 

An appellation can bridge such gaps through regulations. Although NVV still opposes cultivation within Napa County, it wants any formal cannabis appellation to provide a strong structure.

“Our belief is that if there is going to be an appellation system, it should be robust and meaningful,” says Stults. “Any appellation system that is not robust and meaningful takes away from all appellations systems. We didn’t want that to happen, so, moving forward, we wanted to offer our input and experience from working within the AVA system since 1981 to help them.”

Richard Mendelson, a key architect of the AVA system, agrees. Mendelson, who lives in Napa and produces wine from his small vineyard, was the attorney behind the petition to create the 16 AVAs within Napa Valley. He has handled legal matters that touch nearly every corner of the wine business. He also heads the Wine Law & Policy Program at University of California, Berkeley.

“It is true that I spent a large part of my career working on the American wine appellation system, particularly in Napa, but elsewhere, as well, establishing AVAs for various petitioners,” says Mendelson. One of the courses he teaches is Protecting Products of Place: The Law of Geographic Indications (GI). “GI is kind of the umbrella term for all kinds of appellations, not just wine or cannabis, but any product from agricultural products to textiles to handicrafts—you name it,” he says.

Mendelson is often approached by people who seek to create appellations systems for other products. 

“That’s how the cannabis industry introduction came into place,” he says. “Growers, yes, but the primary interest to me is legacy growers, like the organization Genine represents.” 

Mendelson concedes he “didn’t know much about cannabis” before he began to advise on it. He provides consultation for both growers and government officials who wanted to know how to set up a regulatory system. 

“Do you regulate it through the Department of Alcoholic Beverage control? Do you use the same tied-houses and distribution systems and pricing controls and taxation, all the same trade practices and issues?” he says were all questions being bandied about.

Appellations were definitely on the table during those early consulting days, Mendelson says. 

“From the get-go, we identified appellations as something that would be relevant for cannabis as a specialty product,” he says. “One in which the cultivators believed, just like winegrowers do, that different products and cultivars grown in different locations have different product characteristics.

“That is the essence, really, of what an appellation system is: where the product can express the terroir of the area.”

Mendelson began to believe in cannabis appellations when he saw how cultivators could identify “a product origin just by tasting, seeing or smelling it in the way that André Tchelistcheff can with wine. When that happens, there’s an expertise there.”

Mendelson initially questioned whether cannabis, as an annual plant, could express terroir.

“Absolutely,” says Coleman. “Cannabis cultivars from, say, Big Sur, have specific genetics that work with a cooler, wetter climate, for example. The bud structure is more open, which allows it to perform better in a coastal region.” 

Cannabis can be grown outdoors, indoors or a mixture of both. A grower may choose based on historic and location-specific cultural practices, like those that deter wildlife and law enforcement; and regional cultivars, which can reflect factors like different soil and compost compositions, humidity and pH balance.

Rather than focus on politics, Benzinger says that many cannabis cultivators in California like himself were “a little bit more” concerned with soil, climate and the environment that contributes to the plant’s health. He says that it’s crucial that farming techniques like biodynamic and organic practices were included in the strictures. “The job of that type of farming is to make a plant more sensitive,” says Benzinger. When you farm with minimal inputs, the plant can become woven into the environment.

“We’re behind, the cannabis business,” says Benziger. “But we can catch up because we’re on an annual schedule, not years, like with wine, [where] you have to make the wine, age the wine. So we can move quickly in identifying different attributes we want in a plant that reflects the location it was grown in.” Tweaks can be made easily from year-to-year, he says.

The various grower councils and organizations in Northern California, which lead the appellations charge, envision cannabis being bought and sold internationally one day.

For now, the CFDA has begun to receive petitions. The Origins Council, NVV, and others are still crafting and evaluating plans.

Coleman says that, based on terroir, she thinks smaller appellations will be created within county lines. “The naming of the appellation will be tied to the specific boundaries of the appellation, so somehow tied into the history and identity of the region, such as Salmon Creek, following a watershed that is a part of the boundary, for example. Or the historic name that correlates to the geographic boundaries,” she says, giving a preview of what is likely to come.

As for cannabis growers’ new friends in the wine biz? They’re excited to be on board. Stults, from NVV, says there was skepticism about cannabis growers at the beginning. Now, they have become friends. 

“We are freely sharing perspectives and information now, we talk a lot,” says Stults. “We realized over the last year that we both want these systems to be successful and meaningful. And, you know, the word is that it might become the model for the country.”

The hope of programs like California’s appellations program would be to capitalize on the cache of California cannabis, but without a federal marketplace, it’s impossible for that dream to fully be realized.

This piece is adapted from Bryant’s article in Wine Enthusiast

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