Governor Newsom's Split Decision: Cannabis Cafes Approved, But Small Growers Left in Limbo
In late September, two cannabis-related bills reached Governor Gavin Newsom's desk for consideration. While one was signed into law, the other was not.
Initially vetoed by Gov. Newsom in 2023 due to concerns about second-hand smoke, Bill 1775 was signed this go round and will now go into effect Jan 1, 2025. Drawing comparisons to Amsterdam’s model, Bill 1775 will allow local municipalities to begin permitting “cannabis cafes” to serve non-cannabis-infused food and drinks to patrons consuming cannabis on site. Under the current law, cannabis retailers with designated consumption areas are only allowed to sell prepackaged food and drinks. However, the new legislation will expand this to include freshly prepared offerings, putting cannabis cafes on par with bars and clubs, eliminating a significant disadvantage previously faced by these establishments.
Unlike Bill 1775, Bill 1111 did not get signed into law by Gov. Newsom, which would have provided a much-needed boost to small cultivators. The bill proposed creating a special event sales license, allowing small cultivators to sell their cannabis and cannabis products, grown by the license holder, at temporary state-licensed events. Essentially, it would have created a cannabis “farmers market,” similar to initiatives seen in New York, offering small-batch producers an additional revenue stream. While Bill 1111 was not slated to take effect until January 2026, its rejection leaves small cultivators with limited options. The primary reasons for the failure of Bill 1111 were concerns that cannabis farmers' markets could become a loophole for black market activity and undermine the existing retail licensing framework. Additionally, there were fears that these events would place a significant burden on the Department of Cannabis Control, making it difficult for the agency to effectively regulate and enforce compliance. However, in his explanation for the veto, Gov. Newsom left open the possibility for future compromise, hinting that the issue could be revisited with tighter regulatory safeguards. It’s been a difficult journey for small cannabis cultivators in California, and the challenges are far from over.
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