Gov. Newsom Vetoes Cannabis Café Bill

Gov. Newsom Vetoes Cannabis Café Bill


On Oct. 8, Gov. Newsom vetoed Assembly (AB) Bill 374.

This legislation would have allowed businesspeople to operate cannabis cafés in California, like those in Amsterdam, where non-marijuana food products can be served and consumed. This is despite the existing federal ban on the entire industry.

The bill, authored by Assemblymember Matt Haney (D-San Francisco), would have also allowed café owners to host and sell tickets to live events.

In his veto message, Newsom said he appreciates the author’s intention to support cannabis retailers, many of them struggling to make a profit. However, he is concerned that the legislation “could undermine California's long-standing smoke-free workplace protections.”

“Protecting the health and safety of workers is paramount. I encourage the author to address this concern in subsequent legislation,” wrote the Governor.

Responding to Newsom’s decision to return AB 374 unsigned, Haney drew parallels to California’s wine industry in a statement released Sunday.

"Californians are proud of our state's wine culture, and we do everything we can to make sure that our winemakers receive the support they need -- we need to be doing the exact same thing for cannabis,” he wrote. “If we don't start better supporting these businesses, we are going to lose decades of being at the forefront of the cannabis movement and other states will be ready to swoop in and take it from us.”

Throughout the legislative process the bill has attracted both praise and criticism with some applauding it for the business opportunities it presents and others expressing strong disapproval because of health concerns such as second-hand smoke.

“Lots of people want to enjoy legal cannabis in the company of others,” said Haney. “And many people want to do that while sipping coffee, eating a scone, or listening to music.”

For owners of cannabis product stores, AB 374 presented opportunities to scale their businesses.

Nina Parks is a co-founder of Equity Trade Network which is a non-profit collective that provides small businesses with supply chain business resources within the cannabis industry in California. She also served on the Cannabis Oversight Committee in San Francisco where she advocated for more equity as regulation was being developed. She said her cannabis lifestyle brand, Gift of Doja was set to resume hosting live, curated events that promote safe social spaces.

Parks told California Black Media (CBM) that AB 374 is a step in the right direction.

“The ability to at least have non-cannabis foods being able to be sold at dispensaries also gives dispensary owners an opportunity to put another revenue stream in their business. Being able to have non-cannabis related sales in your establishment really allows for another revenue stream for store owners. It is also an opportunity for cannabis businesses to remove the stigma and normalize consumption,” says Parks.

In cities like Los Angeles where programs are in place to help people affected by the War on Drugs, and other low-income entrepreneurs, launch cannabis-related businesses, the legislation was seen as offering hope.

LA Mayor Karen Bass is working to expand business licensing and compliance for Social Equity applicants and licensees to receive guidance from marijuana industry experts. A Social Equity Social Equity Individual Applicant is defined as an individual who fulfills at least two of the following three criteria: (1) Low-Income; (2) a prior California Cannabis Arrest or Conviction; (3) ten years' cumulative residency in a Disproportionately Impacted Area.

While consuming cannabis on-site at cannabis retailers is technically legal in California, selling non-cannabis-infused products is not permitted. Supporters of AB 374 said the bill would have allowed cannabis retailers to diversify their operations and transition away from the limited dispensary model by selling non-cannabis-infused foods.

“It should have happened a long time ago. We let Colorado and other states go before us and California should’ve been the state to have already perfected this, says Brian Johnson, 51, an entrepreneur in Orange County.

As a shop owner and cannabis advocate, Johnson is eagerly waiting for his vision to become a reality. He blames red tape and excessively high taxes as obstacles to progress. However, like most cannabis entrepreneurs, he remains enthusiastic.

“Those who were criminalized and got their record expunged can get back to their entrepreneurial spirit,” says Johnson.

The strongest opposition to AB 374 came from advocates who argued that the legislation would erase decades of health safeguards put in place for businesses to protect employees by maintaining smoke-free work environments.

“Workers should not have to choose between their health and a good job. California has fought hard to protect workers and ensure a safe, healthy, smoke-free work environment,” the American Cancer Society Cancer Action Network, the American Heart Association and the American Lung Association wrote in a letter of opposition to the legislation.