California’s OCal Cannabis Certification Program – The National Law Review

california’s-ocal-cannabis-certification-program-–-the-national-law-review

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California’s comparable-to-organic “OCal” certification program for cannabis and nonmanufactured cannabis products officially went into effect on July 14, 2021.  The OCal program represents a new branch of state cannabis regulation, but remains firmly rooted in existing state and federal organics standards and procedures.  Its goal is to “assure consumers” that certified OCal products “meet a consistent standard comparable to standards met by products sold, labeled, or represented as organic.”
The OCal program raises a variety questions for cultivators, distributors, certifying agents and consumers.  We provide answers to six of those questions here.
What’s the difference between “OCal” and Organic?
Most OCal requirements will be very familiar to California organic producers, as the program generally follows the National Organics Program (NOP) in its substantive requirements, and the California Organics Program (COP) in enforcement provisions.  Of course, the United States Department of Agriculture (USDA) cannot expand organics certification to cannabis without authorization—and legalization.  So until Congress takes action, it falls on states to take the initiative.
Both OCal and NOP require certified operations, including certified cultivators and distributors, to develop and update a “system plan” that documents many practices and procedures required for both programs, including:

Tillage and cultivation practices that maintain or improve the physical, chemical, and biological condition of soil and minimize soil erosion

Crop rotations, cover crops, intercropping, alley cropping, hedgerows or the application of plant and animal materials

Plant and animal management to maintain or improve soil organic matter content, biological diversity, nutrient cycling, and microbial activity, including through composting

Crop health enhancements, including selection of plant species and varieties with regard to suitability to site-specific conditions and resistance to prevalent pests, weeds, and diseases

Pest control through introduction of predators and parasites, habitat maintenance, and weed control through mowing, grazing, and mulching

Land to be used for OCal or organic cultivation must not have any prohibited substances for three years prior to certification.  Certified operations must use their own seeds and planting stock, or seeds and planting stock from an OCal or organic certified nursery (subject to limited exceptions for availability).  Both organic and OCal operations must implement measures to prevent any commingling of certified and non-certified products, and to prevent contact operations and products with prohibited substances.  OCal regulations incorporate the “National List of Allowed and Prohibited Substances” (7 C.F.R. §§ 205.601, 205.602), which applies to organic products certified through the NOP.
Under the original OCal authorizing legislation, the Medicinal and Adult-Use Cannabis Regulation and Safety Act, the OCal program would have been eliminated if and when cannabis became eligible for NOP certification.  That sunset provision was removed in 2019 by Assembly Bill (AB) 97.  Under current law, parallel certifications of cannabis as “OCal” and of other crops as Organic will be the standard in California for the foreseeable future.
Will Container-Grown Cannabis be Eligible for OCal Certification?
California Department of Food and Agriculture (CDFA) guidance expressly allows OCal certification of plants grown in container systems, including hydroponic systems, so long as they comply with regulations.  This comports with current USDA interpretation of federal organics regulations.  Currently, a challenge to organic certification for “soil-less” crops is pending[1] before the U.S. Court of Appeals for the Ninth Circuit.  Because most OCal statutes and regulations mirror their federal model, including provisions that require soil management and enhancement, a ruling that ends organic certification for hydroponic and other soil-less crops could also raise doubt about OCal eligibility for container-grown cannabis.  For example, both the NOP and the OCal program require production practices that “maintain or improve the natural resources of the operation, including “ soil, water, wetlands, woodlands, and wildlife,” and require “cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity.”
What about products that include cannabis, can they be OCal certified?
The OCal program under the CDFA will only apply to “non-manufactured” cannabis products, defined as products containing only one ingredient: cannabis.  Only limited processing, including drying, curing, grading, trimming, rolling, and packaging, is allowed.  AB 97 required the California Department of Public Health (CDPH) to create an OCal certification program for manufactured cannabis products, which include edibles, concentrates and topicals.  No rulemaking has been initiated as of July 2021.
Who is in charge of OCal certification and compliance?
In order to qualify for and maintain a licensed, OCal-certified operation, cultivators and distributors will need to meet requirements implemented by at least three entities: the CDFA, certifying agents, and the newly-created California Department of Cannabis Control (DCC).  The DCC took over cannabis licensing in 2020, taking on responsibilities previously held by the CDFA.  The OCal program was not included within its scope of authority, however.  Under the current statutory scheme, cultivators and distributors seeking OCal certification will need to maintain compliance with regulations administered by both state agencies.
Certifying agents also play a key role in OCal implementation, as the entities that actually grant certification to cultivators and growers.  Private entities (non-profits or not-for-profit organizations) and local jurisdictions (counties and cities) are eligible to serve as certifying agents.  For accreditation, organizations demonstrate the knowledge, staff and operational competence to run a certification program; they may be accredited either through the CDFA or the NOP.  Registration requires annual reporting, including documentation of annual site inspections of all of all operations certified by the agent. Certifying agents are required to undergo regular performance evaluations and outside audits.
What does OCal certification mean for privacy and confidentiality?
OCal certified operations must allow certifying agents and CDFA officials to access and inspect facilities and records during business hours, and must also make all agricultural inputs, cannabis and cannabis waste accessible for examination and sampling.  They are subject to unannounced inspections, as well as mandatory annual reviews and periodic testing of pre-and post-harvest cannabis for pesticide residue.  Any application or drift of any prohibited substance onto an OCal facility must be reported immediately, as well as any change in operations that could affect compliance.  CDFA officials may inspect, audit, review or investigate a certified operation or a registered agent at any time, with or without prior notice.
While these requirements ensure transparency and support enforcement, OCal regulations require “strict confidentiality” for any business-related information concerning any certified operation.
How are OCal rules and regulations enforced?
The CDFA may suspend an operation for six months or more when it believes that it has violated or is not in compliance with OCal regulations.  It may also revoke the accreditation of a certified agent that fails to meet reporting obligations and other requirements.  The CDFA has authority to impose fines up to $17,952.00 per violation for labeling or selling a product “OCal” or “organic” not in compliance with regulations, and to $20,000.00 per violation for other willful violations.  Certifying agents are subject to at least six months’ suspension for failing to maintain accreditation requirements.  The CDFA will grant a hearing regarding any alleged violations, and enforcement actions may be appealed through an agency appeals process or in court.
FOOTNOTES
[1] Link to prior article on this topic here.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 221
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