California Law Allowing Marijuana Cafes Takes Effect, With First Shops Already Expanding Services

A new California law allowing marijuana cafes officially took effect on Wednesday, authorizing local governments throughout the state to allow cannabis retailers to expand their services. And certain businesses are already leveraging the policy change.

Gov. Gavin Newsom (D) signed a bill from Assemblymember Matt Haney (D) into law in September. But while local governments can now start the process of allowing the Amsterdam-like cafes, it’s expected to take months before most jurisdictions have rules in place to conform to the state law.

Overall, the legislation will allow on-site marijuana consumption at licensed businesses to also offer non-cannabis food and non-alcoholic drinks and host live events such as concerts if they get permission from their local government.

Newsom vetoed a prior version of Haney’s cannabis cafe bill, saying that while he appreciated that the intent was to “provide cannabis retailers with increased business opportunities and an avenue to attract new customers,” he felt “concerned this bill could undermine California’s long-standing smoke-free workplace protections.”

To that end, the measure as enacted contains changes to create separation between public consumption spaces and back rooms of businesses where food is prepared or stored in order to better protect the health of workers in line with the governor’s concerns.

“I commend the author for incorporating additional safeguards, such as expressly protecting employees discretion to wear a mask for respiration, paid for at the expense of the employer, and requiring employees to receive additional guidance on the risks of secondhand cannabis smoke,” Newsom said in a signing statement in September.

The law makes explicitly clear that hemp-based food items or drinks are not considered “non-cannabis” products that could be sold at the cafes. It also says that non-cannabis items “shall be stored and displayed separately and distinctly from all cannabis and cannabis products present on the premises.”

The legislation will also allow live musical or other performances on the premises of a cannabis retailer in areas where on-site consumption is allowed.

There have been examples of California businesses that have found workarounds to permit on-site consumption while making food available to guests—but they’ve operated in a grey area, partnering with separately licensed restaurants that receive the profits.

The expectation is that—because those cities such as Los Angeles and San Francisco have already established certain regulations around consumption lounges, including ventilation requirements—they may be quicker to the draw to open up the additional services.

In September, Haney, the sponsor, also addressed a statement from the American Cancer Society (ACS), which urged the governor to veto his legislation out of concern about the potential health implications of smoke exposure.

“If you’re worried about secondhand smoke, shouldn’t we give people safe places to go—to consume with others who have made that choice?” he said. “Right now, because of the limits on where people can smoke legally, many people may be forced to smoke at home, around their kids, or in a car or on the street where others are walking by.”

“If you’re worried about secondhand smoke, support us in giving people safe places to go where there are protections and where people have made that choice,” he said.

Ahead of Newsom’s signing of the measure, actor Woody Harrelson—who owns a marijuana lounge in West Hollywood called The Woods, alongside co-founders comedian Bill Maher and tennis star John McEnroe—called for its enactment. Whoopi Goldberg also joined in that push, with a video encouraging the governor to sign it.

The Woods is among the first licensed cannabis businesses to expand their offerings under the new law, according to Fox 11.

“It’s a win-win-win deal for everybody,” Jay Handal, co-founder of The Woods, said. “This will bring us more revenue, which will bring, hopefully, more sales tax—which, god knows, the state can use based on its deficits.”

“It’s going to be good for the consumer as well because now they can sit as if they were in Starbucks—they can take out their computer, do their work on our Wi-Fi and have a cup of cappuccino or a pastry,” he said.

Maisha Bahati, CEO of the Sacramento-based Crystal Nugs, told CBS 13 that her business is preparing for the possibility of adding a consumption lounge, but that she doesn’t expect local legislators to implement rules for another year.

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Meanwhile, in September the governor also signed a series of modest reform proposals, including a bill to make it so medical marijuana donated to low-income patients is tax-exempt and another measure to prevent what advocates call the “double taxation” of marijuana by restricting the ability of local governments to calculate their cannabis levies after state taxes are already applied.

While the governor supports cannabis legalization, he’s been notably reserved about various drug policy proposals in recent years, for example vetoing legislation to legalize psychedelics and allow safe consumption sites for illegal drugs, in addition to nixing legislation to allow small marijuana growers to sell their products directly to consumers at state-organized farmers markets.

Meanwhile, a recent report released by a panel of experts convened by California’s Department of Public Health (CDPH) made a number of major policy recommendations that would radically alter the landscape of the state’s marijuana market, for example by limiting the THC potency of cannabis flower and concentrates, requiring products be sold in plain packaging and setting up a government-run cannabis monopoly along the lines of how stores work in Quebec, Canada.

Separately, in October, an industry effort to halt California’s enforcement of new emergency regulations banning consumable hemp products fell short, with a state judge denying a request for a temporary restraining order.

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