SAN DIEGO — California is set to usher in a new chapter for its cannabis industry in 2025 with the passage of Assembly Bill 1775 (AB 1775), which Governor Gavin Newsom signed into law on September 30, 2024. 

The legislation, authored by Assemblymember Matt Haney (D-San Francisco), allows licensed cannabis retailers and microbusinesses to operate cannabis cafes. These establishments will permit on-site cannabis consumption and sell freshly prepared non-cannabis food and beverages.

The bill, which takes effect on January 1, 2025, amends Section 26200 of California’s Business and Professions Code and expands the limited on-site consumption permissions previously granted under Proposition 64, which was passed in 2016. 

Under AB 1775, cannabis cafes can also host live entertainment, such as concerts and performances, provided they meet stringent local and state regulations. However, alcohol sales remain strictly prohibited, and access is restricted to patrons aged 21 and older.

The bill includes safeguards to address public health concerns. Employers must provide masks for workers exposed to secondhand cannabis smoke and ensure proper ventilation systems are in place. Local jurisdictions retain significant authority over implementation, including zoning compliance and permitting processes.

The bill has faced criticism from groups like the American Cancer Society Cancer Action Network (ACS CAN), who have argued that secondhand cannabis smoke poses similar health risks as tobacco smoke.

San Diego County’s first cannabis consumption lounge is already under construction in National City. Approved earlier this year, it is set to open in the coming months.

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“It took a lot of energy and moving parts because it’s a new type of business, so there’s not a lot of models for us to follow or look to,” Alex Ayon, the CEO of Sessions by the Bay,  told CBS 8 in April.

While the new laws now allow for the lounges statewide, operators must still obtain permits and adhere to local planning guidelines before opening a cannabis lounge.