HOW CALIFORNIA HAS POSITIONED SMALL CANNABIS BUSINESS FOR SUCCESS UNDER THE SUNRISE PROVISION
When the rules of any game change, multiple predictions about the future start to surface, and California’s cannabis community now finds itself in that game-changing world with the passing of Proposition 64. But what other states like Colorado and Washington failed to do in their recreational cannabis rollouts, California learned from and has chosen to support key communities like legacy farmers and small cannabis businesses for the first five years under the Prop. 64 term sunrise provision. Just the ray of light the California cannabis business community needs. Read more below…
Proponents of Prop. 64 state that the concerns of legacy farmers and small cannabis businesses were directly taken into consideration when drafting the sunrise provision. Sacramento attorney, Richard Miadich, drafted Prop. 64 with provisions to specifically cover those areas of concern like regulatory structures, local control, worker protections, criminal justice reforms, and the anti-monopoly provisions set up to aid small cannabis business, the sunrise provision. The voices of the cannabis community ultimately helped shape the precautionary laws now in place such as the “micro-business licenses” that allow a person to cultivate up to a quarter-acre of cannabis, and manufacture, distribute and sell it all under one license.These same micro-licenses allow for small craft growers to succeed in the market as they are subject to different standards than other businesses and their fees are scaled to size.
Prop. 64 set aside stipulations that do not require growers to use a third-party distributor for transportation of their product to dispensaries, helping cut costs even more and leaving less room for distributors to come in with big business. Rules were also set up to prohibit non- California residents or businesses to obtain marijuana licenses for the first two years, drawing a line between existing small business operations and corporate or monopoly influence even further.
What does this really mean to the small cannabis business operator in California?
Well, the sunrise provision is already casting warm rays on the future, both by regulatory agencies and the growers or business owners themselves. The theme that everybody is focused upon for success? Marketing!
The California Legislative Analyst’s Office dedicated a section of it’s Prop. 64 review report to the future of the Emerald Triangle cultivation economy, and directly stated in their report “that if local growers and businesses successfully marketed their marijuana products as premium goods, consumers might be willing to pay above-average prices for them.” This concept of establishing higher-quality, premium goods through targeted branding is already growing roots in other historic cannabis cultivation regions like Mendocino county. Mendocino cannabis growers recognize the achievements of the co- op branding approaches done for decades through California wineries and have now started to expand this branding potential within their industry under the Cannabis Appellations Project.
The Cannabis Appellations Project is a region of eleven appellations specifically designated for cannabis cultivation within Mendocino County. The Project establishes county branding in the cannabis industry and is modeled after Napa wine appellations, which sets up wine regions by designating smaller bioregions within a county that are consistent in climate, soil type, elevation, and other characteristics that impact the crops that are grown there.
Micro-regions and bioregions within Mendocino County are based on ecological characteristics of that area and are called American Viticultural Areas (AVA), a distinction that is officially designated by the Alcohol and Tobacco Tax and Trade Bureau (TTB) of the United States Department of the Treasury. Although the California cannabis industry is not designated at this federal level, Mendocino County supports this program to preserve and highlight Mendocino cannabis in the hope that it will offer some protection against big corporations and outside companies from capitalizing on the names of the region.
“that if local growers and businesses successfully marketed their marijuana products as premium goods, consumers might be willing to pay above-average prices for them.”
One of the goals of the Cannabis Appellations Project is to set up a certification such as “Mendocino Made,” which will allow local farmers to brand their products under a larger regional umbrella, as well as work in smaller groups to set up branding for the appellations and their associated characteristics. Those within the project believe this kind of organization and focus on the county’s cannabis cultivation heritage is essential to where the industry is going in the future, specifically with being able to connect the county’s cannabis farmers to local food movements and regional co-ops that would further build the trust of the consumer to the overall brand. There are many legacy farmers working with “heritage” strains in areas all around California that could benefit from such appellation projects, and the stronger this initial “Mendocino Made” brand becomes in the eyes of the California consumer, the more likely other co-ops and appellation collectives will form state-wide in the future. Leaving many small cannabis businesses and growers right now with a clear direction on how to map out a successful future.
One of the frontrunners in this co-op branding initiative is long-time Mendocino cannabis growers Swami Chaitanya and his wife, Nikki Lastreto. Their brand, Swami Select, is a pure, organic cannabis that is consistently sought after by Bay Area medical marijuana patients. Swami and Nikki started their growing operations over eleven years ago and know the key to survival in this changing industry is the very thing that has been the burden of so many businesses who have worked for so long in the shadows: branding. Swami Select started advertising the “Mendocino county, CA” distinction on their product last year and Swami Chaitanya has stated that branding will be the key to his and other farmers’ continual success in the future. While California is preparing for the start date of Prop. 64 in 2018, other legalized states have been evolving into their own craft cannabis lifestyles at a rapid pace. Creating a pre-defined landscape that California cannabis businesses will immediately be thrust into. The difference is that even the established states know California has always held the key to cultivating high-end cannabis brand reputations and is quite possibly still the main catalyst for new national models. This distinguished cannabis history that California is known for, is largely in part to all the mom-and-pop growers that are revered for their expertise in horticulture and their passion for the plant and helping others; growers like Swami Chaitanya and those found in Mendocino County and the Emerald Triangle. These craft cultivators bring a level of dedication and experience that consumers will not see coming from big canna-business, a distinction that will continue to be why consumers pay more for refined cannabis, especially if their brand speaks to this separation of product quality. The proof is in the product, and cannabis is already moving towards this crafted approach everywhere, but if consumers don’t understand these distinctions, if the marketing doesn’t help the consumer recognize that their finely- cultivated purchase is created not only by environmental and cultural terroir but also from the farmer’s methodology and techniques, the mistake businesses will have made is not following the path that the sunrise provision clearly was created to support.
No matter how California rolls out Prop. 64 next year, California’s cannabis success could be the nation’s game changer for sure. Future national models are sprouting right now, below everybody’s feet, in fertile California soil that has been carefully cultivated from the government agencies and proponents that drafted Prop. 64 to the historic cannabis farmers that originally cultivated this industry. All of these “farmers” have planted the seeds of the future and supplied business with the tools to success naming them as quality branding, targeted marketing, and supporting the co-op, appellation or distinct recognitions. The nickname sunrise provision was dutifully coined by it’s creators who knew helping small cannabis business would help the industry as a whole. That the sunrise provision has the ray-like focus for the first five years to give it the time this industry needed to grow. So now the only question for anybody looking to be successful in California’s new cannabis game is, why wait?
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