California Nears Legalization of Cannabis Cafés and Events
A movement to legalize cannabis cafés and cannabis-friendly live events in California is nearing fruition, as Assembly Bill 374 has advanced to Governor Gavin Newsom for final approval. The bill, which received strong support in the Assembly, aims to eliminate major restrictions on cannabis consumption lounges. If signed into law, it would allow cannabis retailers to operate traditional kitchens, serve prepared foods and beverages, and host live music events.
The bill was sponsored by CA Assembly Member Matt Haney, based on the desire of many adult cannabis consumers to enjoy legal cannabis in a social setting that was not solely focused on the use of cannabis and included the ability to enjoy coffee, food, or music either while consuming cannabis or with non-cannabis using friends. Mr. Haney argued that there are no valid reasons, whether economic, health-related, or safety-related, to prohibit such activities. Once signed, the proposed law is set to take effect on January 1, 2024.
However, the passage of the bill will not necessarily allow a cannabis café in all areas of California. As with cannabis retail licenses, which are still banned in 61% of CA municipalities, the ability to open a cannabis café will be subject to local jurisdictions permitting consumption lounges, which could pose challenges in various cities and counties. Currently, California does not issue specific licenses for consumption lounges, so applicants can only apply for State retail permits in municipalities that will allow retail cannabis facilities. Additionally, existing regulations make it difficult for licensees to generate revenue at consumption lounges, as they are limited to selling cannabis and accessories or renting out smoking devices. Consumption lounges, and the soon to open cannabis cafes, must rely on third-party providers for prepared foods and beverages.
Unfortunately, these issues are not unique to the State of California. While consumption lounges are seen as the next phase of the cannabis industry across the United States, their growth has been hindered by administrative setbacks, regulatory delays, and widespread prohibitions. In Las Vegas, plans to open consumption lounges have faced funding concerns and changing regulations, causing significant delays. Massachusetts recently abandoned a pilot program for marijuana cafes, likely postponing the opening of consumption spaces in that state.
All of this being said, the passage of Assembly Bill 374 is a major victory for California’s cannabis industry and will provide a significant boost to its cannabis retail licensees who can now offer more social and inclusive experiences to consumers. Be sure to contact us at Global Go to learn more information and to see if a cannabis consumption lounge is the right investment for you!