California governor vetoes cannabis cafe bill

California Gov. Gavin Newsom last week vetoed a bill that would have allowed cannabis cafes to offer weed, food and drinks to patrons in licensed establishments reminiscent of the famous coffee shops in Amsterdam. The measure, Assembly Bill 374 (AB 374), was passed by the California legislature last month after being introduced by Democratic Rep. Matt Haney earlier this year.

Under current California law, cannabis consumption lounges are not allowed to sell freshly prepared food to their guests. A rule change passed last November allows lounges to offer packaged food and drinks and allow customers to bring their own freshly prepared products on a limited basis, but bars the businesses themselves from serving most non-fortified products to their customers.

Haney’s bill would have allowed cannabis consumption lounges in California to sell freshly prepared food and drinks and host live entertainment events. According to Haney’s office, more than 700 cannabis cafés, often referred to as coffee shops, in the Netherlands attract 1.5 million visitors per year. Allowing the state’s consumer lounges to operate under a similar business model would create new economic opportunities for the companies and could serve as a draw for tourists and locals to visit struggling downtown business districts.

“Many people want to enjoy legal cannabis in the company of others. And many people want to do that while drinking coffee, eating a scone or listening to music,” Haney said in a statement. “There is absolutely no good reason from an economic, health or safety perspective that the state should make this illegal. If an authorized cannabis retail store also wants to sell a cup of coffee and a sandwich, we should allow cities to make that possible and no longer hinder these small businesses.”

But on Saturday, Newsom vetoed AB 374, even though the governor said he appreciated “the author’s intent to provide cannabis retailers with more business opportunities and a way to attract new customers.” In his veto message, Newsom said he was concerned that the bill conflicts with California law, which requires a smoke-free workplace for all workers.

“Protecting the health and safety of workers is of the utmost importance. I encourage the author to address this concern in subsequent legislation,” the governor added. “For this reason, I cannot sign this bill.”

After Newsom vetoed the bill, Haney condemned the move in a statement on social media, saying the bill was necessary to support California’s regulated cannabis industry, which continues to face challenges such as high costs and competition the state’s widespread unlicensed operators.

“The bill was widely viewed as an attempt to level the playing field for the heavily taxed and regulated legal cannabis industry, which in California is forced to compete with a thriving cannabis black market,” Haney said. “The illegal sale of cannabis is extremely profitable in California because illegal sellers simply ignore costly regulations, product testing, permits and taxes. Legal cannabis sales in California reached $4 billion in 2020, while illegal sales are believed to have topped $8 billion in the same year.”

Haney added that voters had already approved smoking at businesses covered by the bill and vowed to draft a new bill to legalize cannabis cafes in the next legislative session.

“California voters have already decided to legalize smoking cannabis in community pharmacies. AB 374 only allows businesses where smoking is already taking place to sell coffee, food and host live shows,” Haney wrote on X, the social media platform formerly known as Twitter. “I appreciate and respect the governor’s concerns about worker health. And I look forward to working closely with his office and union leaders to ensure we get it right when I reintroduce the bill next year.”