Federal prohibition has been a thorn in cannabis’ side for a long time. And even as tens of states move to legalize recreational and medical marijuana, it remains illegal at the federal level and this has held the industry back in many ways. For instance, state-legal cannabis cannot be considered ‘organic’, a title bestowed by the U.S. Department of Agriculture, even if the growers maintained the purported ‘organic’ standards while growing the crop. However, regulators in California, the largest legal cannabis market in the world, have unveiled proposed regulations for a program that would equal the federally bestowed ‘organic’ status.
Draft regulation for the OCal Program, a statewide certification program, was released in early May, with a public comment period open until July 7. According to the California Department of Food and Agriculture (“CDFA”), the program “will ensure that cannabis products bearing the OCal seal have been certified to consistent, uniform standards comparable to the National Organic Program.” The CDFA is required to have established the certification program for cannabis by January 1, 2021.
Growers who meet a certain set of rules, including proper use of the approved fertilizers and pesticides, will be able to apply the OCal seal to their crop, and brands looking to stand out will be able to charge their health-conscious customers a premium for OCal-certified products. California will join Washington state as the only two state-legal cannabis markets to consider an organic certification for marijuana products, and being the largest legal cannabis market in the nation, it could set a precedent for other states.
According to Kristin Nevedal, Chair and Founder of the International Cannabis Farmers Association, the state-based program will “probably instill more confidence.” Consumers are willing to spend a premium for products deemed ‘organic’, she says. “It’s recognizable, and the branding opportunities are readily apparent.” She adds that some cannabis companies have already been using the consumer appetite for organically grown cannabis and have started labeling their products ‘clean and green.’
Sarah Armstrong, policy chair for the Southern California Coalition, the largest cannabis trade association in the region, hopes the program will be cost-effective enough to be well-received by the industry. “Our hope is that the proposed program will be cost-effective enough that the cannabis industry can fully participate. Right now, testing expenses represent 10% of the cost of product production, resulting in an exceptionally pure product at no small expense. Hopefully, the Organics Program can work with cultivators to develop methods that ensure the program safeguards purity in a cost-effective manner.”
Experts say industry actors like Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) could be hoping that many other states adopt similar quality standards so that the industry is lifted as a whole.
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