Why it matters: The veto of Assembly Bill 374 by California Governor Gavin Newsom means that cannabis cafes will not be allowed to serve freshly prepared food and beverages. This decision has implications for the regulated cannabis industry, as it hinders their ability to compete with the thriving illegal market.
What they are saying: Democratic Assemblymember Matt Haney, who introduced the bill, argues that allowing cannabis cafes to serve food and drinks would provide new economic opportunities for businesses and draw tourists and locals to struggling downtown areas. However, Governor Newsom expressed concerns about the potential conflict with California legislation on providing a smoke-free workplace for all workers.
The big picture: The vetoed bill was seen as an attempt to level the playing field for the regulated cannabis industry in the face of competition from the illegal market. Haney believes that addressing this issue is crucial as illegal cannabis sales in California are estimated to surpass $8 billion, while legal sales reached $4 billion in 2020. The legalization of smoking in public dispensaries has already been authorized by voters, and Haney plans to draft new legislation to legalize cannabis cafes in the future.
What to watch: It will be important to see if Haney is successful in introducing new legislation to legalize cannabis cafes in the next legislative session. Additionally, the impact of the veto on the regulated cannabis industry and its ability to compete with the illegal market will be worth monitoring.
My take: Allowing cannabis cafes to serve food and beverages could have provided a boost to the regulated cannabis industry and supported struggling downtown business districts. However, concerns about worker’s health and the conflict with smoke-free workplace legislation are valid considerations. It will be interesting to see how future legislation addresses these concerns while still providing economic opportunities for the industry.
