In a significant move, the California Assembly has given the green light to a bill that aims to legalize marijuana cafes, allowing licensed dispensaries to offer non-cannabis food and beverages alongside their cannabis products, subject to local approval.
Assembly member Matt Haney emphasized the struggles faced by cannabis businesses due to over-saturation, high taxes, and a thriving black market. Addressing these challenges, Haney stated that Assembly Bill 374 (AB 374) empowers local governments to authorize the preparation and sale of non-cannabis foods and soft drinks at licensed cannabis consumption lounges.
It is important to note that AB 374 does not permit coffee shops to sell cannabis. Instead, it offers licensed cannabis shops the opportunity to sell coffee, provided they receive pre-approval from local governments. This legislative measure aims to create an environment where existing cannabis businesses can diversify their offerings, flourish, and generate employment opportunities by introducing coffee or live jazz performances.
The bill explicitly prohibits the sale of alcoholic beverages at cannabis cafes, as well as smoking tobacco. However, it does authorize retailers and microbusinesses to host live musical or other performances on their premises in areas where cannabis consumption is allowed. Additionally, these establishments will be able to offer freshly prepared food and drinks, with prepackaged food sales limited to retailers, aligning with the state’s Department of Cannabis Control (DCC) regulations established in late 2022.
Currently, some California businesses operate in a gray area, partnering with separately licensed restaurants to permit on-site cannabis consumption while making food available to their guests. AB 374 aims to provide legal clarity and autonomy to cannabis retailers, allowing them to expand their operations beyond the sale of cannabis products.
Assembly member Haney stressed the need to reform the existing legislation, stating that cannabis shops should not be limited to selling only drugs. The ability to sell items like muffins and coffee will not only support small businesses but also grant local government greater autonomy.
This move by the California Assembly comes alongside another legislative development in the state Senate. Recently, the Senate approved a bill that would prevent employers from inquiring about prior marijuana use during job applications. If passed by the Assembly, this bill would build on existing employment protections that prohibit employers from penalizing employees for using cannabis in compliance with state law outside of work.
In addition, the DCC awarded research grants of nearly $20 million to 16 academic institutions, further bolstering the scientific exploration of cannabis. These grants, funded by marijuana tax revenue, will support studies on various aspects of cannabis, including novel cannabinoids such as delta-8 THC and the genetic characteristics of “legacy” strains cultivated within the state. And California officials recently announced the allocation of over $50 million in marijuana tax-funded community reinvestment grants, demonstrating the state’s commitment to utilizing cannabis tax revenue for community initiatives.
The passing of AB 374 and the continued efforts to improve cannabis regulations and support research highlight California’s commitment to driving the growth and development of the legal cannabis industry, benefiting businesses, consumers, and communities across the state.
