Cannabis Industry panics over proposed label law
"Controversial California Bill Threatens to Stifle Cannabis Branding and Small Farms.
Amber Senter has spent the past three years building cannabis brands that celebrate her identity as a Black woman living in Oakland, like her Landrace Origins brand, a specialty line of cannabis that pairs African coffee with heirloom pot strains.
Senter says she’s found a successful path in California’s cutthroat pot economy by leaning into her individuality. But she told SFGATE that her marketing strategy could become illegal if the recently passed Assembly Bill 1207, which is aimed at making pot advertising less appealing to children, is signed by California Gov. Gavin Newsom. That’s because the law appears to block pot companies from including any images of humans, among other restrictions, on their labels and social media posts.
“People want to know that I’m a Black, queer woman. How else will they know if I don’t show them my face?” Senter said. “... I think people just really need to understand that this is an attack on our identities.”
AB 1207’s supporters say legal cannabis marketing needs to be tightly regulated to prevent products from appealing to children. They point to rising numbers of youth who are accidentally consuming cannabis, and blame flashy pot packaging.
“These exposures are heavily influenced by the use of features on cannabis product packaging that are explicitly attractive to children,” wrote Assemblymember Jacqui Irwin, a Southern California Democrat who introduced AB 1207, in a state analysis of the bill.
If signed into law, AB 1207 would make it illegal to use cartoons or depictions of animals and most plants and vegetables on cannabis packaging and advertising. However, the state’s cannabis industry says the bill is written so broadly that it blocks far more than just advertising that appeals to children. They say it would, for instance, stop business owners like Senter from showing their faces on social media while promoting their products, and would block an organic cannabis farm from putting flowers on its labels.
Industry groups are warning that AB 1207 could put small-scale pot farms out of business — in part because it would go into effect on Jan. 1, 2024, according to Irwin’s office, giving companies only a few months to use up existing packaging and create new labels.
“It’s extraordinarily expensive to build a brand. … To have to rebuild your entire brand, it will just put a lot of companies under,” said Genine Coleman, the executive director of Origins Council, a trade group representing more than 800 California cannabis farms. “It’s not feasible. It’s too much and too catastrophic in that sense.”
Gov. Gavin Newsom has until Oct. 14 to act on the bill. Both the Department of Cannabis Control and a spokesperson for the governor declined to comment on the cannabis industry’s concerns about AB 1207.
‘Attractive to children’
California’s pot regulations already make it illegal for companies to use product labels that are “attractive to children,” but the regulations are currently interpreted on a case-by-case basis, according to a state Assembly analysis of AB 1207. This proposed law would add a blanket list of prohibited items that cannot be included on any products.
James Roberts, the owner of The Bohemian Chemist, a small cannabis retailer in Mendocino County, believes AB 1207 would have a disastrous effect on his business. Almost all of his store-branded products include a small cartoon depiction of an “Egyptian goddess” adorned with gold robes. He said it was in no way intended to target children, but he would still need to destroy more than $200,000 worth of packaging to comply with the law.
“We will most likely have to fold our own business as most of our investment right now is tied up in packaging inventory,” Roberts said in an email to SFGATE. “We would lose this overnight. I know many others in our area that will have to do the same.”
Irwin, in an emailed statement to SFGATE, dismissed repacking products as a “minimal cost” for pot companies.
“The Legislature heard and dismissed arguments to allow for retailers to sell off existing products that were attractive to children,” Irwin said. “… No industry deserves leeway to phase out harming children from their business model.”
Irwin and supporters of her bill claim that the pot industry is adorning cannabis products with labels that appeal to children, and sometimes even mimic well-known products like Oreo cookies and McFlurry desserts.
Lynn Silver, a medical doctor at the Public Health Institute, a California nonprofit that has lobbied heavily for the labeling law, said in an emailed statement that the group has found hundreds of products at legal dispensaries that have labels mimicking existing children’s foods, “such as edibles Cocoa Krispies Treats, [an] Indica Oreos Cookie 10-pack [and] Cheers Queers Pop Rocks.”
The cannabis industry counters that state law and trademark laws already make it illegal for legal cannabis stores to sell products that resemble existing consumer goods. The industry groups also said that the worst offenders of inappropriate packaging and marketing are in California’s booming illegal cannabis market and the unregulated hemp market, both of which will not be affected by Irwin’s bill.
“While we share the author’s goals of protecting public health, [AB 1207] will only undermine access to safe, tested cannabis products while bolstering an unlicensed cannabis market that notoriously sells and markets to children,” a group of four industry groups wrote in a letter opposing Irwin’s bill.
Silver said in an emailed statement that regardless of what illicit companies are doing, products attractive to kids are still “a serious problem in the legal market.”
“A problem existing in the illicit market is not an excuse to fail to address it in products sold by operators licensed by the State of California,” Silver wrote.
‘A blatant attack’
California’s small cannabis farms have been facing an uphill battle since the state legalized cannabis in 2016; they now compete against massive agricultural companies that grow cannabis on hundreds of acres. The state has seen a massive glut of cannabis, which has subsequently dropped wholesale prices and put multi-generational pot farms out of business.
The legacy cannabis operators see themselves in an existential fight against big pot farms, and they believe Irwin’s bill would be a final nail in the coffin, because they would no longer be able to properly market — or differentiate — themselves. Lindsey Renner, the owner of Native Humboldt Farms, wrote on LinkedIn last week that the bill is a “blatant attack on small craft farms and brands.”
“I wouldn’t be able to share an image of the homesteader apple trees on my farm planted in the 1800’s. I wouldn’t be able to post about the veggie garden on my farm. Simply, I wouldn’t be able to market my farm at all. My entire brand story and identity would cease to exist,” Renner wrote.
Coleman, from the Origins Council, said that as written, the law would not only regulate pot packaging, but also extend to advertising and even social media posts.
A staff member from Irwin’s office agreed with this more extensive interpretation of the law when contacted by SFGATE. The same staff member also confirmed that AB 1207 would block business owners from using their own face on marketing materials, though they downplayed the effect this could have on business owners like Senter.
“Many identities including LGBTQ+ identities cannot be communicated by a picture of human, a text-based description is often already functionally needed to educate the consumer,” the staff member wrote in an email.
Senter strongly disagrees. She said that her own identity as a Black and queer woman is central to her work in legal cannabis, and the proposed law will hurt all minority business owners in the marijuana industry.
“I pull from my experiences and my culture when I’m creating products and brands and marketing. I’m talking about our experiences and our struggles and celebrating them in the form of cannabis products,” Senter said. “This bill is a direct attack on all of that.”
