By Lila Brown
SACRAMENTO — A bill that would have allowed cannabis cafes in the state was vetoed earlier this month by Gov. Newsom,
Assembly Bill 374 would have allowed people to use cannabis products inside businesses where non-marijuana food products are served and consumed.
The bill, authored by Assemblymat Matt Haney, D-San Francisco, also would have allowed café owners to host and sell tickets to live events.
In his veto message, Newsom said he appreciates the author’s intention to support cannabis retailers, many of them struggling to make a profit. However, he is concerned that the legislation “could undermine California’s long-standing smoke-free workplace protections.”
“Protecting the health and safety of workers is paramount,” Newsom wrote. “I encourage the author to address this concern in subsequent legislation.
Responding to Newsom’s decision, Haney drew parallels to California’s wine industry.
“Californians are proud of our state’s wine culture and we do everything we can to make sure that our winemakers receive the support they need. We need to be doing the exact same thing for cannabis,” he wrote. “If we don’t start better supporting these businesses, we are going to lose decades of being at the forefront of the cannabis movement and other states will be ready to swoop in and take it from us.”
Throughout the legislative process the bill attracted both praise and criticism with some applauding it for the business opportunities it presents and others expressing strong disapproval because of health concerns such as second-hand smoke.
“Lots of people want to enjoy legal cannabis in the company of others,” Haney said. “And many people want to do that while sipping coffee, eating a scone or listening to music.”
For owners of cannabis product stores, AB 374 presented opportunities to scale their businesses.
Nina Parks is a co-founder of Equity Trade Network, which is a nonprofit collective that provides small businesses with supply chain business resources within the cannabis industry. She also served on the Cannabis Oversight Committee in San Francisco where she advocated for more equity as regulation was being developed. She said her cannabis lifestyle brand, Gift of Doja, was set to resume hosting live, curated events that promote safe social spaces.
Parks told California Black Media that AB 374 is a step in the right direction.
“The ability to at least have non-cannabis foods being able to be sold at dispensaries also gives dispensary owners an opportunity to put another revenue stream in their business,” she said. “Being able to have non-cannabis related sales in your establishment really allows for another revenue stream for store owners. It is also an opportunity for cannabis businesses to remove the stigma and normalize consumption.”
In cities like Los Angeles the legislation was seen as offering hope.
Mayor Karen Bass is working to expand business licensing and compliance for social equity applicants and licensees to receive guidance from marijuana industry experts. A social equity individual applicant is defined as an individual who fulfills at least two of the following three criteria: low income; a prior California cannabis arrest or conviction; and 10 years’ cumulative residency in a disproportionately impacted area.
While consuming cannabis on-site at cannabis retailers is technically legal in California, selling non-cannabis-infused products is not permitted. Supporters of AB 374 said the bill would have allowed cannabis retailers to diversify their operations and transition away from the limited dispensary model by selling non-cannabis-infused foods.
“It should have happened a long time ago,” said Brian Johnson, 51, an entrepreneur in Orange County. “We let Colorado and other states go before us and California should’ve been the state to have already perfected this.”
As a shop owner and cannabis advocate, Johnson is eagerly waiting for his vision to become a reality. He blames red tape and excessively high taxes as obstacles to progress. However, like most cannabis entrepreneurs, he remains enthusiastic.
“Those who were criminalized and got their record expunged can get back to their entrepreneurial spirit,” Johnson said.
The strongest opposition to AB 374 came from advocates who argued that the legislation would erase decades of health safeguards put in place for businesses to protect employees by maintaining smoke-free work environments.
“Workers should not have to choose between their health and a good job,” the American Cancer Society Cancer Action Network, the American Heart Association and the American Lung Association wrote in a letter of opposition to the legislation. “California has fought hard to protect workers and ensure a safe, healthy, smoke-free work environment.”
Newsom did sign Senate Bill 51, legislation that promotes greater diversity in California’s cannabis industry.
The bill authored by state Sen. Steven Bradford, D-Gardena, will allow the California Department of Cannabis Control to issue provisional licenses for local cannabis retail equity applicants.
A provisional license allows applicants to operate their business while completing the requirements for an annual license, and eventually become fully licensed participants in the cannabis retail market.
“For California’s legal cannabis market to succeed, it must look like California,” Bradford said. “Right now, it doesn’t. Time and time again, I hear from community members who are being boxed out of the industry. Equity applicants deserve an opportunity to stand up a business, obtain a license, and participate in the market.”
In 2018, Bradford introduced SB 1294, the California Cannabis Equity Act. This law facilitates the participation of individuals from diverse backgrounds and underserved communities in California’s legalized cannabis industry. However, the regulations for an annual license have proven to be a challenge for equity applicants, demonstrating a need for the provisional licensing program authorized by SB 51.
SB 51 will become law Jan. 1.
“Equity applicants, who bore the brunt of California’s failed history of cannabis prohibition, are disproportionately impacted by a lack of access to capital and technical support, steep licensing fees, lengthy land-use approvals, environmental requirements, and more,” Newsom said in an Oct. 8 statement.
“While I support the author’s effort to bring temporary relief to equity applicants, this bill does not address the fundamental issues that continue to increase costs and uncertainty for those seeking to participate in the legal market,” Newsom added.
Lila Brown is a reporter for California Black Media.