California Setting Rules for Finding Pot’s Napa Valley

California’s cannabis has a world-class reputation, and the state wants to make sure the multibillion-dollar pot crop gets the formal name recognition and respect it deserves.

To acknowledge appellations and terroir—the distinctive soil and climate conditions in a geographic area that give flavor and depth to cannabis buds just as they do to cabernet sauvignon grapes—state regulators are drafting rules for the world’s largest marijuana market.

“Terroir is everything. Terroir is what appellations of origins is about,” said Eric Sklar, cofounder and board member of the Napa Valley Cannabis Association and former vice chair of Napa Valley Vintners. Sklar grows ...