Licensing Blog

Amsterdam-style Cannabis Cafes Coming to California? Here’s What it Would Look Like if Assembly Bill 374 is Signed into Law

Amsterdam-style Cannabis Cafes Coming to California? Here’s What it Would Look Like if Assembly Bill 374 is Signed into Law

California’s cannabis businesses may take on an “Amsterdam cannabis café style-approach” in the near future if Governor Newsom signs Assembly Bill 374 into law. In summary, Assembly Bill 374 would authorize a local jurisdiction to allow the preparation or sale of non-cannabis food or beverage products by a licensed retailer or microbusiness in an area where the consumption of cannabis is permitted. Further, it would permit the sale of tickets for live musical or other performances on the premise of a licensed retailer or microbusiness in the area where the consumption of cannabis is permitted. However, such licensees will not be able to prepare or sell industrial hemp or products containing industrial hemp. Let’s dissect what Assembly Bill 374 will allow in the Golden State:

Will the local municipalities still have authority over cannabis businesses in their jurisdiction? Yes. The regulations set forth in Assembly Bill 374 will not supersede nor limit the authority of California municipalities in their purview to adopt and enforce ordinances to regulate cannabis businesses operating in their jurisdiction such as zoning and land use requirements, local business licensing requirements, and even the ability to prohibit the establishment altogether from operating within their boundaries.

If approved by the municipality, what will events held by licensees look like? Pursuant to Assembly Bill 374, the state can issue a temporary event license to a licensee authorizing onsite sales and consumption by persons twenty-one (21) years and older if approved by a local jurisdiction and located at a venue that is expressly approved for the purpose of such events. A state temporary event license will only be issued in local jurisdictions that authorize such events. Further, a licensee who applies for a temporary event license must, at least sixty (60) days before the event, provide the Department a list of licensees that will be providing onsite sales of cannabis or cannabis products at the event.

Upon completion of the event, any unsold inventory of cannabis or cannabis products can be returned to the licensee’s retail premises; however, all such reconciled products must be noted in licensee’s track and trace system prior to transport. Moreover, all unsold inventory must be kept in the original packaging it was placed in prior to the event.

Although Californians may be able to partake in the sale and consumption of cannabis and cannabis products at authorized events, alcohol consumption on the venue premises will be strictly prohibited for the day of the event.

Are there any limitations to how I can consume cannabis at a licensed retailer’s premise or microbusiness’ premise? Although it will be dependent on the municipality’s approved ordinance, Assembly Bill 374 permits local jurisdictions to allow smoking, vaporizing and ingesting of cannabis or cannabis products.

What conditions must be met for the local jurisdiction to authorize such activities (i.e.) onsite consumption, non-cannabis food and beverage sales, and live performances? First, access to areas where cannabis consumption is allowed must be restricted to individuals twenty-one (21) years and older. Further, cannabis consumption cannot be visible from any public space nor from any non-age restricted areas. Lastly, the sale or consumption of alcohol and tobacco is prohibited at the authorized premise.

How is this different from the licensed consumption lounges in California? Currently, there are only a few cannabis lounges primarily in cities such as San Francisco and Oakland. Unfortunately, their operations are limited as they can only offer cannabis products and cannot provide any other items like food and beverages.

So, what is the current status of Assembly Bill 374? Assembly Bill 374 received strong bipartisan support, passing the California Senate with a vote of thirty-three (33) to three (3) and the Assembly with a vote of sixty-six (66) to nine (9) on September 11th, 2023. Now, we are just awaiting approval from Governor Newsom. He has until October 14th, 2023, to sign Assembly Bill 374 into law. If approved, the law will come into effect on January 1, 2024.

As we anxiously await Governor Newsom’s approval, now is the time to work with a Team of experts to understand the next steps your business needs to take in California’s newest endeavors in the cannabis industry. Contact us today to discuss your options!