Cannabis Knowledge & Insights

SB67 – California Cannabis Cultivation: Appellations of Origin

The cannabis industry saw SB67 pass on September 30th which expands geographical indicators and mandates that cannabis appellations be grounded in terroir.

If you need help with your cannabis business, then please reach out to us at https://greengrowthcpas.com/get-started/ or call 800-674-9050.

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Cannabis lawyer Omar Figueroa explains how this appellation of origin can be used as a cannabis marketing tactic to improve the value of California cannabis grown in certain areas as well as discuss the future of the cannabis industry.

This is great for cannabis cultivation businesses that are located in highly desirable areas and could improve the value of those cannabis real estate properties.

Video Transcript

September 30th, Governor Gavin Newsom signed Senate bill SB67. So what does this mean for California cannabis cultivation businesses? So, well, I’m going to break this down to the most basic terms. And then after that, we’ll hear a more detailed explanation and conversation with Omar Figueroa. So at its core, SB67 helps to create a legal framework for locality. Designation of cannabis is, are called terroir and the layman’s term, and kind of this, the basic explanation is that cannabis where it’s grown, it’s going to affect how it tastes, where it’s in the world, the country, the state, or even the farm that it’s grown on. And it’s only going to pertain to full sun grown outdoor cannabis, exposed to all the elements and cannabis that’s in the ground. This is not for indoor cannabis cultivation. So currently you hear people say, Hey, this is Humboldt cannabis, or this is LA cannabis, Los Angeles cannabis.

Cool, great. Let me get some of that, but the more refined cannabis connoisseur or gangier is they’re going to be called. You’ll hear more about that in the end of this video here, they know there’s more granularity to the location than just saying this is Humboldt cannabis or Los Angeles cannabis. They want to know, Hey, which mountain in Humboldt did it come from? Or which part of the County was it grown in. And why do they want to know that they want to know? Because if you’re in any kind of agricultural product, especially cannabis, you know, that different locations using the same genetics are going to produce a different end product. And there are many factors that impact cannabis cultivation and the products that come from that things like the amount of rain, the humidity, the sun intensity, the soil, mineral composition, and much, much more.

And an example of this, you see in other industries is going to be just like the wine industry, right? You have French wines, right? They’re very highly coveted around the globe, but they’re not all the same. And they all taste pretty different from each other. For example, you have Bordeaux wine. This is a large region on the Atlantic coast of France and they produce great, great wines, dry sweet white wines, you know, red wines, but you know where you get a Bordeaux, you’re getting a Bordeaux, you know exactly what you’re getting now, champagne, which is another region in France. This is situated on the Eastern cycles to Belgium and Luxembourg. They’re known for their very, you know, sparkling wines, right? You’ve drank, you’ve had champagne before. You know, that’s where it originates from. Now. You can get that other places, but if it’s a French champagne, it’s from there.

Now, again, these are both French wines, but significantly different from each other. Now this is going to be the same thing with cannabis. You’re going to have, you know, Humboldt County cannabis, but it could from the Eastern County part of the County or the Northern part, or from the solver Southern facing mountain or at any rate, there’s going to be these designations example. We’ll talk about in the end of this video is about Palos Verde’s and how that’s becoming another one of those areas specifically to say, this cannabis is from here. Now, how will this benefit California cannabis businesses that are in these specific, specific areas that are going to be designated. So, number one, it could increase the value of properties in these designated areas. Think about Napa Valley compared to Valley center, which is in San Diego, right? Napa Valley, Napa Valley has a brand and it’s, you know, distinguishable, it’s designated, it’s protected.

People know that Napa Valley wines, they have a high, high, good, like a halo effect to them. Essentially. Now that could happen in cannabis too. When you get cannabis grown in a specific region, it could command a premium. So that’s the second benefit is that it helps to differentiate you from all the other people in this crowded cannabis industry. Now you could potentially demand a premium for your product from consumers when they become accustomed to getting this particular cannabis from this particular area. Now it’s no secret. You walk into a dispensary, you see lots and lots and lots of brands. So pretty much all the same. So this designation or the system that the California cannabis legislator, legislators have pushed through, could help create that designation to help you command a premium. Now, this is a long-term plan. It’s going to take many, many years to unfold and it’s going to be, you know, what the future of the cannabis industry is going to be or what it could look like in the future.

Now it’s inspiring to see this long range planning by the California government on cannabis origins. So we’ll see how it all plays out. Now, if you have any questions about SB 67, or need help with your cannabis business, then please reach out to us via our website at GreengrowthCPAs.com. Click that get started button in the top right corner, or give us a call (800) 674-9050. Now let’s hop into a more detailed discussion about SB 67 with Omar Figueroa from the law offices of Omar Figueroa on September 30th. …, there was a lot that happens in California. There was four bills that got passed specifically, Senate bill 67. That, …, kind of, let’s just jump into that. …, Omar, if you could just kind of give us some color and context to why this one is so important.

Yeah. Senate bill, bill 67, basically codified a requirement that appellations have origin, …, before outdoor cultivation, it required the cannabis he planted in the ground, …, in open air and with no artificial lights and no structures. …, what this basically required is terroir a causal link between the place, …, and the product, because it’s requiring that the cannabis you exposed to all of the environmental factors, including the soil, the wind, the water, the rain, the hail, you know, like the good and the bad. And so, …, you know, that’s one of the, …, challenges of having a terroir based appellations system is that, you know, it really makes the cannabis, that’s a product, …, dependent on all of the environmental and geographic factors. And so there’s going to be, …, different cannabis products produced in different years. And, you know, we already have that with cannabis.

There’s different vintages when you’re going to see the same with cannabis, …, that’s grown outdoors, there’s going to be different vintages and they’re going to result in different expressions. …, but the idea of a cannabis appellation I think is, …, really it’s a novel, you know, there’s nothing like it, it’s the world’s first cannabis appellation. And I know, …, some of the people who came up with it and, …, you know, it’s, it turns out that cannabis had a not insignificant role in the development of this idea. This is how cannabis derived the idea and, …, basically, and will, …, impart value on cannabis that is grown with them. And in particular appellations, because there’s certain areas in the world world where cannabis grows in a unique way, you know, just like, …, you know, with wine that you could have the same exact genetics and the same exact methods and come up with a very different product, depending on where in the world, those, …, genetics and methods are cultivated, and it’s the same idea with cannabis.

And so in order to have, …, you know, …, meaningful terroir based appellations of origin system, it had to be rooted in the ground itself and in the land. And this will strengthen the link between the cultivator and the land, and it allows the cultivators to claim a premium from the land. And it also makes it so that the land has to be preserved to preserve those factors that make it unique. So it’s really a way of preserving the land and imparting value, …, to the product so that the cannabis, because becomes an expression of the place. I’m also a member of the California cannabis tourism association. We’ve been thinking about how appellations of origin were really, …, serve as a way to differentiate, …, geographical areas. You know, that particular appellations will now be allowed to host like a, …, event, you know, like we have wine roads for the wine, or like particular wine appellations have like a wine road on the weekend and barrel tastings on the other weekend.

And, you know, it’s a huge drop to consumers. It’s a massive, …, tourism, …, attraction. And, …, with the California cannabis tourism association, we know that the demand is there for cannabis. There’s a recent poll that was taken among active travelers in the United States. And almost one in three, …, would, …, actively looks for candidates when they’re looking for where to travel. You know, they want cannabis to be part of their experience and that if there were more cannabis travel offerings that, …, they would seek those out because that is always part of the calculation for this particular segment that is underserved. And so we think there’s going to be an explosion in cannabis, tourism and cannabis appellations are a way to like, …, be able to describe what is unique about a particular area and geographical region and what, …, characteristics are going to be developed from that.

And right now it sounds like highly abstract and theoretical. …, but let me give you an example of that. One of my clients, …, is thinking about, you know, submitting and it’s the Palo Verde appellations, which is at the intersection of Trinity, …, Humboldt and Mendocino counties. And there’s a Palo Verde fire district and it’s composed of volunteer firefighters. And, …, many of these firefighters are also cannabis growers and they’re in the cannabis industry and this is a whole Palo Verde. You know, tri County region has a tradition of self-help and volunteer firefighters are a big part of it and the community always helps each other out. And so, …, because it’s such a unique care, you know, region like it’s a little bit dry, it’s not coastal. …, and it has its own characteristics. I think it’s an excellent candidate for an appellation of origin.

And also because it has such an awesome story about volunteer firefighters who are banding together to save their communities and we’re helping each other out. It’s a type of story that really lends itself to memorable and distinctive branding, you know, and you can support, …, you know, first responders and public safety professionals by supporting such an enterprise. And so I think, …, it’s an example of something that’s super exciting. And so in preparation for this petition, we now have to like define the geographical area, which we kind of know, but you know, the exact, the details so that territorial boundary, but now we have to like figure out what makes it unique. What in the soil one, you know, there’s going to be like different types of foil in those soil is going to like imbue particular characteristics on the cannabis. …, same with like the precipitation, the human,

Maybe when was different things,

All of these, …, you know, co unique factors that unique combination of factors that basically create terroir. And so right now, like we haven’t developed the, or at least I don’t have the vocabulary articulately explain it, but it’s exciting to be on the verge of a new world where, you know, in 20 years, people will be able to explain cannabis appellations. And that right now, right now, it’s just kind of like a fancy, full theory, you know, but in 20 years it’s going to be a reality and people are going to be like, we’re so glad people took the time to lay out the appellations because our property is worth so much more because it’s appellation and our products are worth a premium because they’re are within the appellation. We saw those incredible effects with Napa and Sonoma County, you know, in Sebastopol, I’m in Sonoma County.

And, …, everything on the Sonoma County side is far more expensive. And if you go to the other side of the County line, it’s cheaper and the re and it’s the same soil, you know, it’s basically the same part of the earth with an arbitrary human made the biting honoring. And, …, it’s really because of, you know, that, …, tremendous marketing that Sonoma and Napa have done, and also like the renowned reputation of the products associated with that region. And so I think that’s the idea with cannabis appellations, …, but that dovetails with my interest in representing the craft cultivators who make the best cannabis on earth, because I think as somebody who’s into cannabis and, you know, if people are in the cannabis industry and they’re not into cannabis and, you know, they should be in the financial services and, you know, if you can see the real green and you can appreciate it, then I think, …, focusing, you know, me as an and celery services provider, I try to like represent the people who grow the best cannabis, because I think they have a real passion for their craft. And it’s beautiful, and life is too short to waste on, on, …, you know, working with those who are not passionate about what they’re doing, especially when they’re there, so their opportunities. And,

And so this kind of dovetails into your Gangier thing as well, I’m guessing, right? At some point you’re going to try to bring all the, all the other, the cannabis stuff together, the locality stuff together, you know, place of origin is gonna be very big into your gangier thing.

Oh, absolutely. I gangier you know, the master cannabis service is going to link together all of these different disparate, …, connections, you know, or, …, disparate elements. …, so they’re going to put together right now. …, we don’t have a professional who really can explain how to rate cannabis in a consistent way, but with the idea of the gangier and a systematic assessment protocol, that is very thorough, we are going to start developing a vocabulary to quality candidates. And it’s not just going to be like, this is the fire, because right now that is like the one qualifier that is university, but it’s so multi-day event that it could mean anything, you know, and it, it means nothing because it could mean any exactly. It means nothing because it can mean anything. And so, …, once more, …, definitely vocabulary gets developed. You know, we’re going to be able to have more fine tuned conversations about quality cannabis, but I’m really exciting, excited that, you know, the cannabis industry is progressing so quickly and that, …, this Gangier program, you can find out more about it at [inaudible] dot com, …, you know, is developing.

And I encourage everybody who thinks that they’re a cannabis expert to be Humboldt, because right now there’s nobody not even the people who developed the gangier program considered themselves qualified enough to pass the test because it’s a multi-disciplinary instructional. And you, you have to learn everything that, you know, Frenchy cannoli knows about hash and everything that, you know, …, Nikki and Swami know about like sampling flour and all the other participants before you really have the knowledge base required to be like first level Gangier, you know, so it was cool to work on a platform where we’re trying to come up with the next level of cognitive cannabis Gangier …, because I think, you know, the budtenders, …, is generally like an entry-level position in the cannabis industry, and there is no cannabis professional yet who has, who can articulately, …, describe cannabis. And then the other part of the gangier, and this is exciting part from a business perspective is they’re really, …, taught how to make money for the business.

You know, like they’re about driving sales in a restaurant is really about driving alcohol sales in a place that serves alcohol with dinner. And a lot of that is customer education. It’s developing the pallets of the customers. So as you’re educating them and slowly exposing them to more rarefied experiences, that they may not be ready for at first, but eventually they’ll get there. And it’s the same thing with a gangier it’s educating the customer base, being able to curate the menu at a place so that it will be successful. And that I’d also, …, you know, basically educating the, …, you know, well, I’ve gone to a gangier. It’s interesting because they don’t have to like necessarily work at a dispensary. They could also be a consultant. They could be an event designer. Ultimately a gangier is an experienced designer, and they’re designing user experiences for people who want to use cannabis.

And, you know, people don’t all have the same goals when they’re having cannabis experiences. You could have a super experienced user who is looking for something they’d never tried before, or you could have like a novice user who just wants to have a pleasant experience, but doesn’t want something that is too disorienting. And they certainly don’t want to end up in their hotel room like Maureen Dowd, you know, there’s, you have to have like the entire, …, you have got a pretty broad, …, people skillset to be a successful gangier. And that’s something that we discovered as we were trying to figure out, you know, how to put together the education for the gangier. What I worked on was on, …, how to show the perspective, gas, how to actively listening, how to actively listen and active listening is like a skill that is taught to like, …, healthcare professionals.

Or I learned it as a trial lawyer because in order to, …, actively communicate with other human beings, you first have to listen to them. And as a trial lawyer, in order to listen to the jury, it all happens during Bardia. When you’re asking questions to the jurors, and if you’re not listening closely to the jurors, they’re not going to listen to you. And so it’s part of like a reciprocity, like, you know, people will show the same respect that you show them, and if you want them to listen, you better listen first. And, …, what we’re trying to do with the gangier is show them to teach them how to listen very closely so that, …, we’ll never hear the complaint that is often heard about bud tenders. They don’t listen to what I want. They just come in and tell me what they want.

Yeah. They get push, Hey, this is the stuff we have to move today. Cause it’s old, old stock. Make sure you get it out. So now this is great stuff. This is good. That’s, you know, Senate bill 67 is tying into the Gangier stuff. And that they’re, you know, refining the things of the experience and the palette of the, of the cannabis user. I think, you know, most people have not tried cannabis when they just tried it once or twice, but that there’s a whole plethora of types of experiences that you can have from yeah. Being very disoriented to, you know, happy to whatever other kind of in the spectrum of experiences. So thank you, sir.

I mean, people who like, you know, which I thought was pretty interesting, …, Kevin [inaudible] of, …, wonder, Hm, well, …, Wonderland Farfetch is talking about that, but he was saying that there’s many Silicon Valley creative types who like highly stimulating creative cannabis strengths, like getting going. And it’s like, you know what? We call Steve jobs candidates that we’ll get the people like all like keyed up and in that creative mindset. And, …, you know, that, that’s something that, …, I think we’ll see more and more, you know, it’s the functional everyday cannabis and people use to stimulate creativity

A hundred percent. This is great stuff, man. Well, again, thank you for sharing about the update of Senate bill 67 and you know, the Gangier portion, we’ll make sure that this gets into the podcast, but also this is a standalone video here. So, you know, again, thank you for all the information back on. Excellent.

And then also, you know, for many people who think that indoor cannabis is the very best there is, you know, keep an open mind. I urge you to seek and find some full sun outdoor cannabis that was exposed to all the elements. You know, you could try some Swami select cannabis, and that is some of the, you know, like really expansive high energy cannabis that fills you with creative energy. And, …, you know, that really shatters, I think the myth that indoor cannabis is the best. I think like, you know, with wine indoor wine versus outdoor grapes, I probably drink wine made from outdoor grapes, you know? Yeah. Yeah. And it gets to the thing like nuclear power, the sun exactly. There’s that in everyone, I think that the rave now in the discussion is like, Oh, who can get the highest percentage THC, but you’re really looking for the entourage effect.

There’s hundreds and hundreds of cannabinoids. You know, don’t just make one, they, here they are, they all do so many different things. And if you get to experience a different, you know, certain amounts and different types of, …, Canada’s products, you’ll be able to see the different effects. It’s a nuance. You have to kind of be in tune with your body, have a little bit of a memory to remember what you did and did not like, but I think such a spectrum of experiences with cannabis. So I’m very excited to see how these, …, these different types of things play out over the next 10, 12, 15, 20 years, and, you know, increasing the value of certain brands of cannabis that are from certain areas. Well, thank you so much.

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