Business

Climate Change, Appellations Among Emerald Triangle Concerns

By Willis Jacobson
Dec 17, 2020
Image by Sire Printing from Pixabay

Navigating the impacts of climate change, implementing a first-of-its-kind appellations program and dealing with a shifting regulatory and business landscape are among the main concerns for the northern California growers and businesses heading into 2021.

Nicole Elliot, Gov. Gavin Newsom’s top adviser on cannabis matters, opened the Dec. 10 North Coast Cannabis Industry Conference by looking back on some of this year’s accomplishments and ahead to the challenges of the near future. Several operators and industry analysts also joined the virtual forum, presented by the North Bay Business Journal, and weighed in on the California market, which they agreed will be shaped in many ways by what happens in the coming months.

State regulators, Elliott said, will enter the new year looking to move away from the “crisis management” that defined 2020. Instead, she said, they’ll turn their focus to increasing local engagement and helping to develop and maintain a more equitable, diverse and sustainable marketplace. 

“We have a lot of work left to do,” said Elliott, adding that state officials will “take up an immense amount of regulatory refinement in the coming months.”

Among the topics discussed:

Effects of climate change

This year presented several climate-related challenges, including record wildfire damage, after years of increasing concern about drought and heat.

Ross Gordon, policy director for the Humboldt County Growers Alliance (HCGA), noted that Humboldt County suffered less fire damage than some of its Emerald Triangle neighbors, but he said the blazes have amplified concerns of “is this the new normal?”

  • “There’s a lot of conversations we need to have about what resiliency and what good agricultural practice looks like in that [climate change] context,” he said.

The fires also raised worries about the potential impacts that smoke, soot and ash can have on plants.

  • There hasn’t been any “smoking gun” that shows a correlation between smoke-affected plants and an increase in the presence of heavy metals, said Christian Sweeney, the president of laboratory operations for Sonoma Lab Works, a testing lab based in Sonoma County.
  • But, he warned, other environmental factors that result from wildfires, like soot and ash, can lead to hazardous levels of toxins like lead and arsenic in plants.
  • To avoid problems, Sweeney encouraged growers to test their soil before next year’s harvest and to remove any soot and ash from their crops as soon as possible. As the humidity rises, the soot morphs into a gluey, sticky substance that can be “nearly impossible” to remove from plants, he said.

Ready for appellations

A new law set to take effect Jan. 1 will allow growers to participate in a first-of-its-kind appellations program. It’s designed to enable growers to highlight plants from their region while preventing others from claiming false origins on labeling and marketing materials.

  • Gordon, with the HGCA, called the program – a first-ever statewide system for cannabis appellations – “tremendously special and unique” and said it should help the region’s legacy farmers better transition into and compete in the regulated market.
  • Gordon said the program will allow those longtime farmers to share their unique stories and develop brands tied to some of the country’s most culturally-significant cannabis growing areas.
  • The appellations program, Gordon said, “has the potential to both provide a lot of benefit to small and independent legacy cultivators, and also to really [advance] the question of what is craft cannabis.”

Litigation protection

As the cannabis industry has matured, there has been an increase in lawsuits that are common to other traditional industries, like allegations involving breach of contract, said Cynthia Castillo, an attorney who specializes in cannabis with Farella Braun + Martel.

  • Unlike other industries, a lot of cannabis deals are still based on oral and handshake agreements, Castillo said. She suggested such deals are never a good idea and that it is always better to have an attorney draft a written contract. Even if it costs more in the short-term, it can save a lot of headaches down the road, she said.
  • Some cannabis operators believe that because cannabis is federally illegal, a cannabis company doesn’t have to follow federal laws, Castillo said. She stressed that is an incorrect view and encouraged regular compliance checks.
  • Castillo recommended that cannabis operators establish arbitration terms in contracts, and to aim for state courts – rather than federal courts – to settle disputes. “There is some concern that cannabis contracts will not be enforced in federal court,” she said.