California Assembly Bill 1775 (AB 1775), signed into law by Governor Newsom last fall, just went into effect on January 1, 2025.
Assemblymember Matt Haney of San Francisco introduced AB 1775 with the goal of creating Amsterdam-style cannabis cafes, stating, “Lots of people want to enjoy legal cannabis in the company of others…and many people want to do that while sipping coffee, eating a sandwich, or listening to music. There’s no doubt that cannabis cafes will bring massive economic, cultural and creative opportunities and benefits to our state.”
AB 1775 explicitly provides a historic expansion of opportunity for California cannabis retailers and microbusinesses, and lays the groundwork to develop a safer, more community-based consumption experience for cannabis consumers across the state.
New California Cannabis Market Opportunities
Specifically, AB 1775 amended Section 26200 of the California Business and Professions Code to legalize the following activities:
- Cannabis may be consumed on-site at the licensed premises of a retailer, microbusiness, or authorized temporary event.
- Both fresh and pre-packaged non-cannabis food or beverage products may be prepared or sold in a designated consumption area.
- Retailers and micro businesses may host and sell tickets for live entertainment or other types of performances to occur in designated consumption areas.
Key Requirements & Limitations of California Cannabis Cafes
- These Activities are only allowed if the relevant local jurisdiction specifically authorized them.
Moreover, local governments have the authority to implement additional regulations for activities authorized by AB 1775––and may even completely prohibit them.
For example, localities may implement specific local zoning restrictions, additional business license requirements, or compliance regulations aimed at reducing secondhand smoke associated with on-site cannabis consumption.
In addition to local regulation, the text of AB 1775 imposes specific requirements and limitations for the authorized activities.
These include, but are not limited to the following:
- The sale of alcohol or tobacco in a designated consumption area is prohibited.
- Individuals under the age of 21 must not be allowed to access a designated consumption area.
- The consumption of cannabis must not be visible from a public area, or area that is not age-restricted.
- Cannabis products may not be commingled, stored, or displayed with non-cannabis products.
- Cannabis or non-cannabis products may not include hemp.
- Only a licensed distributor or licensed microbusiness may transport cannabis products intended for sale.
Mitigating Workplace Safety Concerns
A previous version of the bill (AB 374) successfully made it through the legislature last year, but Governor Gavin Newsom nonetheless vetoed the bill, citing concerns about cannabis smoke and insufficient workplace safety protections for cannabis employees.
AB 1775 included several key provisions to address and mitigate these concerns, including the following:
- Operators must permit employees to wear a mask for respiration purposes in any area where cannabis is smoked.
- Operators must provide employees working in areas where cannabis is smoked with copies of specific regulatory guidance regarding secondhand cannabis smoke.
- Operators offering on-site cannabis consumption must include secondhand smoke in their analysis of potential work hazards.
- Cannabis may not be smoked or vaporized by any person in food preparation, food storage, or warewashing area of an on-site food facility.
Governor Newsom stated that “protecting the health and safety of workers is paramount to upholding California’s longstanding smoke-free workplace protections,” and commended Asm. Haney for incorporating these additional protections in AB 1775.
Take Advantage of New Market Opportunities with Manzuri Law
It is no secret that California’s cannabis operators are struggling to survive in a market that is plagued by burdensome tax obligations, restrictive compliance obligations, and a thriving illicit market. AB 1775 brings a much needed breath of fresh air to this industry by expanding opportunity for retailers and microbusinesses, and creating a safer, more community-based consumption experience for consumers.
AB 1775, combined with the passion and creativity of California’s cannabis community, has the opportunity to transform California cannabis culture. As Asm. Haney has said, AB 1775 provides the struggling cannabis industry the opportunity to “adapt, innovate, and offer products and experiences that customers want.”
Before the regulated market, Manzuri Law stood next to its clients in the battle for legality. As policy advisors to city and state officials since the beginning of the regulatory market, Manzuri Law has been instrumental in policy influence and elevating the local, state, and national conversation.
Contact our dedicated legal team today to discuss how our team can help you take advantage of these new license opportunities and build a legacy to thrive in California’s commercial cannabis market.