California Attempting to Loosen Cannabis Lounge Restrictions

Few lounges have been successful in the state due to current restrictions.

At least one state lawmaker in Sacramento wants to make it easier for licensed cannabis consumption retailers to turn a profit by allowing shops to open new consumption cafes, a la Amsterdam.

Under the provisions of Assembly Bill 374 from Assemblyman Matt Haney of San Francisco, legal marijuana shops would be permitted to open cafes where they could sell nonalcoholic drinks and food, and even sell tickets to live events such as music concerts or standup comedy.

“We’re missing this big opportunity for California to be a destination for cannabis just like we are for wine. Many people want to enjoy cannabis socially with others,” Haney told Fox KTVU.

Haney said his bill would give licensed cannabis companies more flexibility with their business models and a better way to compete against the underground marijuana market, which has been undercutting legal businesses for years simply by not paying state or local taxes.

“What we’ve done, unfortunately, is put these really harsh restrictions and taxes on these folks, and they’re struggling, and this industry will not make it,” Haney told KTVU. “They’ll lose out to the illegal market unless we allow them to be creative and entrepreneurial.”

Though there are a small number of licensed consumption lounges spread around California, many have had a hard time finding viable business models because they’re typically not allowed to sell cannabis directly to consumers. Finding revenue streams can be tricky, which means the bill could be a game-changer for many companies if it succeeds.

Still, Haney’s measure has a long way to go before becoming law, and it’s uncertain whether Gov. Gavin Newsom would even sign it should the bill arrive at his desk, KQED reported. The bill was introduced Feb. 1 and could have its first committee hearing next month.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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