California lawmakers are looking for ways to help licensed cannabis retailers thrive as legally operating businessowners are burdened with a saturated market, high taxes, and a persisting black market that make it difficult for some to stay afloat, according to a recently proposed bill.
Assembly Bill 374, introduced by Assemblyman Matt Haney (D-San Francisco) in February, seeks to allow local governments to license so-called cannabis cafes where food and beverages would be sold and consumed alongside marijuana, instead of being sold over the counter like a pharmacy.
The bill passed the Assembly floor in May on a 64–9 vote and after an amendment, passed the Senate Rules Committee in August. Now it will head to the Senate floor for a vote, and if passed, will return to its house of origin—the Assembly—for a revote due to the addition of the amendment.
“Lots of people want to enjoy legal cannabis in the company of others,” said Mr. Haney in a press release from April. “And many people want to do that while sipping coffee, eating a scone, or listening to music. There’s absolutely no good reason from an economic, health, or safety standpoint that the state should make that illegal. If an authorized cannabis retail store wants to also sell a cup of coffee and a sandwich, we should allow cities to make that possible and stop holding back these small businesses.”
Mr. Haney argued that the legal sale of food and beverages inside licensed cannabis businesses could help boost legal sales to compete against the black market.
In 2020, California’s legal cannabis sales reached $4 billion, while the state’s illicit sales were projected to have exceeded $8 billion, according to a press release from Mr. Haney.
The proposed bill comes in recognition of the success the Netherlands has had in their decriminalization of marijuana, with Amsterdam—the capital of the country—leading the way in attracting tourists to visit where the use of small amounts is allowed in coffee shops, or “cannabis cafes,” according to Mr. Haney’s office.
While the Netherlands decriminalized the drug in 1976, it is still illegal to carry more than five grams or to consume in public spaces outside of licensed cafes according to media reports.
Over 1.5 million tourists now visit cannabis cafes when visiting the Netherlands, with over 700 such stores across the country making over $1 billion annually, according to Mr. Haney.
He said doing the same in California could achieve a similar result.
“While consuming cannabis on-site at cannabis retailers is technically legal in California, selling non-cannabis-infused products is not. AB 374 is simple because it allows cannabis retailers to diversify their business and move away from the struggling and limited dispensary model by selling non-cannabis-infused foods,” he stated.
Smoking inside buildings is generally not allowed in California. But according to California code, marijuana stores are permitted to have smoking rooms, restricted to those 21 or older and must be out of sight from public view.
According to the bill’s text, cannabis stores would also be allowed to have live music—or other ticketed entertainment performances—alongside food, beverages, and the consumption of marijuana or marijuana-infused products.
Those opposed argue the bill could increase exposure to secondhand smoke for workers inside such stores raising concerns over health and safety, with national organizations such as the American Cancer Society and the American Heart Association officially opposed.
