California’s cannabis microbusinesses and retailers are buzzing about a new state law that could be a game-changer for their industry.
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The law significantly expands what these businesses can offer, allowing them to serve food, drinks, and host live music, creating a more vibrant atmosphere and new growth opportunities. Many hope this will set a precedent for other regulated cannabis markets.
Take The Artist Tree, for example—a marijuana retailer near Los Angeles International Airport. They’ve been eagerly anticipating this change and even designed their new store with a kitchen space, ready to embrace the new law. The store’s founder, Lauren Fontein, said the law reflects changing perceptions around cannabis use and gives cannabis lounges a better chance of thriving.
“This legislation opens the door to a future where cannabis isn’t something to be hidden or restricted but something to be celebrated alongside art, music, and food,” said Angelica Sanchez, senior director of government affairs and compliance at Perfect Union, another cannabis retailer. Perfect Union, which operates several stores in Northern California, is now weighing its options to expand beyond traditional retail.
Although this is great news for cannabis cafes, not all bills are making it through. Just a day before signing this one into law, California Governor Gavin Newsom vetoed another bill that would have allowed small cannabis farmers to sell directly to consumers. However, the new law that did pass—Assembly Bill 1775—means cannabis retailers and microbusinesses can now establish consumption lounges, serve fresh food and drinks (not just prepackaged snacks), and host live music events. The law goes into effect on January 1, pending local government approvals.
Lauren Fontein, from The Artist Tree, thinks this shift will help make cannabis more mainstream and validate the legitimacy of consumption spaces. Currently, most cannabis lounges in California, like those in West Hollywood or the Bay Area, either don’t serve food or have to work with third-party vendors. With this new law, lounges can sell food and drinks directly, which Fontein says should make these businesses more sustainable.
For cannabis brands like Sauce Essentials, this new law opens up even more possibilities. Sauce Essentials, which sells products like gummies and vapes at over 300 stores across the state, sees this as an opportunity to reach new customers. “We’re especially excited to start planning events and creating cool experiences where people can try our products firsthand,” said Emma Shalaway, Sauce Essentials’ marketing director.
The Artist Tree is already preparing for this new era. Their new location near the L.A. airport was built with a kitchen in mind, complete with gas lines and plumbing. Fontein said they’re currently working on food offerings and considering different options, from artisan pizzas to more traditional café fare. The goal is to have everything ready by early 2025, shortly after the new law goes into effect.
In addition to food, The Artist Tree plans to continue offering customers an array of ways to enjoy cannabis. Lounge patrons can rent devices like Puffco Pro dab rigs or gravity bongs, and they even offer a marijuana cocktail program where customers can add a sidecar of THC oil to non-infused drinks.
The Artist Tree’s lounge, located near a busy transportation hub in Los Angeles, draws both locals and travelers. And with a lack of licensed competition in the area, it’s well-positioned to thrive.
Despite challenges in California’s cannabis market—like local governments being slow to approve new licenses—the state remains a leader in cannabis policy. Joshua Horn, co-chair of the Cannabis Law Practice at Fox Rothschild, believes that if California’s new cannabis café model succeeds, it could inspire other states to follow suit.
“The approval of consumption cafés is a reflection of cannabis becoming more mainstream, similar to the advent of cigar bars,” Horn said. “Assuming California succeeds, we should expect more states to offer something similar.”
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