California Breaks New Ground With OCal: Answers To Key Questions About – Mondaq News Alerts

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California Breaks New Ground With OCal: Answers To Key Questions About "Comparable-to-Organic" Cannabis

10 August 2021

Sheppard Mullin Richter & Hampton

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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 pending1 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.

Footnote

1 Link to
prior article on this topic here.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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