Will Cannabis Cafe Culture Finally Be Accepted In California?

Since cannabis was legalized in California, Cannabis Cafes or consumption lounges have not become widely available as many expected. Our friends at CalNORML have made a list of available lounges. As is apparent, there are no cannabis lounges currently open in all of Orange or San Diego County – although there is one currently under construction in National City. Under the current law these businesses have been highly restricted and have only been able to provide cannabis-based products. No additional non-cannabis items are allowed to be sold. This has created a less-than-optimal experience for the relatively few consumption lounges that have managed to open and serve patrons.

California Has Been Slow to Permit Cannabis Cafes

Meanwhile, cannabis stores are designed to be as quick and efficient as possible with no consumption allowed on the premises. The effect of all of these restrictions has hindered the development of cannabis culture and excessively burdened the legal cannabis market. Accordingly, cannabis consumption has been largely limited to enjoying cannabis only at home. This is unlike Colorado, which has established vibrant ‘Cannabis Cafes’ where patrons can consume cannabis, coffee and other food products while socializing with friends.

New Legislation Will Bring Opportunities to Expand Cannabis Cafes

To remove some of the excessive regulations for consumption lounges, California state Assembly member Matt Haney, D-San Francisco, introduced AB 374. This bill would authorize local jurisdictions to allow a cannabis cafe or consumption lounge to sell and prepare non-cannabis food and non-alcoholic beverage products. The bill would also permit selling tickets for live, musical, or other performances on the premises of a cannabis consumption lounge. This could also open the door to permit food trucks at consumption lounges.

On May 31, 2023, AB 374 was passed in the California Assembly. The bill has since worked its way through the Senate, and on June 26, 2023, it passed the Committee on Business, Professions and Economic Development. Next, the bill will be given its third reading and vote by the Senate before it is presumably signed into law by the governor.

A similar bill, SB 285, recently passed the Senate on May 15, 2023, and is now with the Assembly. This bill was introduced by Senator Ben Allen, D-Santa Monica. However, the senate bill does not permit live entertainment. It also requires that food products be prepackaged and does not allow food preparation.

With broad appeal for both bills, it seems that the passage of one or both laws is inevitable, and that California will finally allow cannabis cafes with more enjoyable environments where patrons can enjoy socializing with friends while enjoying food, weed, and even live music. The benefits of this proposed law will also greatly influence tourism, further solidifying California as a world-class cannabis destination.

Further, expanding consumption lounges will create countless business and employment opportunities across the state, and it could also allow these lounges to operate as entertainment venues or cultural hubs integrated within their communities.

Action Plan for Cannabis Cafe Entrepreneurs

Accordingly, with the upcoming legislation nearing passage, those who wish to get involved should do the following:

Research the local laws within your local jurisdiction to see if they permit cannabis consumption lounges. If your local jurisdiction does not, ADVOCATE. Regulated commercial cannabis lounges can help foster communities as attractive meeting places while also supporting local public services through tax revenue. Go to a city council or county planning meeting and persuade the lawmakers of the advantages of allowing cannabis cafes.

If your local city or county does offer an opportunity to obtain a permit for a cannabis lounge, you should discuss this opportunity without delay with your business leadership team and legal counsel. Our office can provide legal advice and business assistance with developing your business plan and obtaining the necessary permits. It can be costly and time-consuming to acquire a local license so beginning this process carefully is crucial. It may also be possible to find a permitted cannabis lounge that is listed for sale with a cannabis business broker, such as Greenlife Business Group. Again, our office can assist you in evaluating these opportunities, conducting due diligence and finalizing a purchase sale agreement.

Other important steps are to develop a business plan, find a location, and secure funding. Location is always a key factor in a business’s success, and cannabis businesses are no different. Unfortunately, cannabis business must also manage strict zoning regulations that vary city to city. Therefore, it is important to pay close attention to any zoning restrictions before purchasing any property.

Insurance and protection against liability must always be considered when starting a business. Concerns of overconsumption often arise around cannabis consumption lounges. It is important for cannabis lounges to have systems in place to monitor patron consumption rates. Liability waivers, in combination with an insurance plan, should be employed to help protect businesses and business owners from any potential injuries or claims arising from lounge activities.

While there are many complexities to consider for building a cannabis business, our attorneys and professional staff are ready to help you achieve success with your cannabis cafe to advance California cannabis culture.