Bill to allow Amsterdam-Style cannabis cafes heads to Newsom’s desk

Assemblymember Matt Haney’s bill AB 374 to allow local California governments to license Amsterdam-style cannabis cafes passed its final legislative hurdles passing out the California State Senate with a 33 to 3 vote and the Assembly with a final 66 to 9 vote.

The bill has enjoyed broad bi-partisan support throughout the legislative process. While cannabis cafes in the Netherlands offer a social experience where coffee, food and live music are enjoyed together with cannabis, these businesses are currently illegal under California law.

Haney’s AB 374 will allow struggling cannabis businesses to diversify away from the marijuana-only “dispensary” model and will bring much-needed tourist dollars into empty downtowns.

“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. There’s absolutely no good reason from an economic, health, or safety standpoint that the state should make that illegal. If an authorized cannabis retail store wants to also sell a cup of coffee and a sandwich, we should allow cities to make that possible and stop holding back these small businesses.”

California is known worldwide as the birthplace of cannabis culture with its early adoption of medical cannabis and its expertise in cultivation, but Amsterdam competes with California for cannabis dollars and for the title of the world capital of cannabis. More than 700 cannabis cafes operate across the Netherlands, and more than 1 billion dollars are spent in Dutch cannabis cafes every year.

California on the other hand, is still dealing with the unintended consequences of decades of a “medical marijuana-only” policy. California’s “dispensaries” have replaced the social aspect of the Amsterdam cannabis scene with pharmacy-like businesses that only allow customers to order cannabis at a counter, purchase nothing else, and then leave.

“California’s small cannabis businesses are struggling,” said Haney. “Issues like over-saturation, high taxes, and the thriving black market are hurting cannabis businesses who follow the rules and pay taxes.”

In 2020, California’s legal cannabis sales reached $4 billion, while the state’s illicit market sales were projected to have exceeded $8 billion.

While consuming cannabis on-site at cannabis retailers is technically legal in California, selling non-cannabis-infused products is not. AB 374 is simple because it allows cannabis retailers to diversify their business by selling non-cannabis-infused foods and selling tickets to live performances.

“To be clear, we’re not saying that coffee shops should be allowed to sell cannabis,” said Haney. “We’re saying that cannabis shops should be allowed to sell coffee. It shouldn’t be illegal for an existing cannabis business to move away from only selling marijuana and instead have the opportunity to grow and create jobs by offering coffee or live jazz.”

Cannabis cafes will only be allowed to open in cities and counties that pass legislation to allow them. If the governor signs AB 374, the bill will come into effect on Jan. 1, 2024. Local governments will then have the opportunity to create a permitting process and regulations for local cannabis cafes. West Hollywood has already passed legislation creating a licensing system, and a similar bill is currently working its way through the San Francisco legislative process.