SACRAMENTO, Calif. (Oct. 2, 2024) – On Monday, California Governor Gavin Newsom signed a bill legalizing cannabis cafes similar to those popular in Amsterdam, despite ongoing federal prohibition on the entire cannabis industry.
Assm. Matt Haney introduced Assembly Bill 1775 (AB1775) on Jan. 3. The new law authorizes licensed cannabis cafes to sell non-marijuana foods and drinks.
Under the old law, licensed businesses could allow marijuana use on their premises, but they were prohibited from selling other food or beverages. Under the new law, local jurisdictions can allow the preparation and sale of non-cannabis food or beverages by a licensed cannabis retailer or microbusiness in an area where the consumption of cannabis is allowed. It also allows cannabis cafes to host live music or other performances on the premises.
The Senate passed AB1775 by a 30-7 vote. The Assembly passed the measure by a 58-6 vote and concurred with some Senate amendments. With Newsom’s signature, the law will go into effect on January 1.
Newsom vetoed a similar bill last year, concerned that it would run afoul of smoke-free workplace protections. The current legislation includes provisions to create separation between public consumption areas and areas where food is prepared and stored. In his signing statement, Newsom lauded these provisions.
“I commend the author for incorporating additional safeguards, such as expressly protecting employees discretion to wear a mask for respiration, paid for at the expense of the employer, and requiring employees to receive additional guidance on the risks of secondhand cannabis smoke.”
EXPANDING THE MARIJUANA MARKET
In November 2016, voters in California approved a ballot measure legalizing marijuana for general use by adults and the law went into effect on Jan. 1, 2018. Since then, the California legislature has passed numerous laws intended to expand the state’s marijuana market despite federal prohibition. For instance, in 2021, Gov. Gavin Newsom signed a bill that requires healthcare facilities in the state to allow terminally ill patients to use medical marijuana. A few years earlier, California severed a link between state and federal tax law, allowing individuals to deduct expenses from legal marijuana businesses. The state also relaxed baking rules for marijuana businesses. The enactment of AB1775 knocks down more barriers to growing the state’s cannabis market. It would further mainstream marijuana, incentivize the market, and allow it to expand despite continued federal prohibition efforts.
There is already one California business that already allows marijuana consumption along with food and drink despite the state law prohibiting it. According to Marijuana Moment, West Hollywood approved a local ordinance in 2017 that allowed a first-of-its-kind retailer to open that serves both marijuana and non-infused foods. The business currently operates in a grey area under emergency regulations. However, according to an analysis of the Assembly-passed bill, final regulations from the state Bureau of Cannabis Control “expressly prohibit” such activity.
EFFECT ON FEDERAL PROHIBITION
Under the federal Controlled Substances Act (CSA) passed in 1970, the federal government maintains complete prohibition of marijuana. Of course, the federal government lacks any constitutional authority to ban or regulate cannabis within the borders of a state, despite the opinion of the politically connected lawyers on the Supreme Court. If you doubt this, ask yourself why it took a constitutional amendment to institute federal alcohol prohibition.
The legalization of marijuana in California removed a huge layer of laws prohibiting the possession and use of marijuana, but federal prohibition remains in effect. This is significant because FBI statistics show that law enforcement makes approximately 99 of 100 marijuana arrests under state, not federal law. When states stop enforcing marijuana laws, they sweep away most of the basis for 99 percent of marijuana arrests.
Furthermore, figures indicate it would take 40 percent of the DEA’s yearly budget just to investigate and raid all of the dispensaries in Los Angeles – a single city in a single state. That doesn’t include the cost of prosecution. The lesson? The feds lack the resources to enforce marijuana prohibition without state assistance.
A GROWING MOVEMENT
Colorado, Washington State, Oregon, and Alaska were the first states to legalize recreational cannabis, and California, Nevada, Maine, and Massachusetts joined them after ballot initiatives in favor of legalization passed in November 2016. Michigan followed suit when voters legalized cannabis for general use in 2018. Vermont became the first state to legalize marijuana through a legislative act in 2018. Illinois followed suit in 2019. New Jersey, Montana, and Arizona all legalized recreational marijuana through ballot measures in the 2020 election. In 2021, New York, New Mexico, Virginia, and Connecticut legalized marijuana through legislative action, and Rhode Island legalized cannabis for adult use in 2022. Missouri and Maryland legalized marijuana in November 2022. Ohio voters approved marijuana for adult use in the November election. Currently, 38 states allow cannabis for medical use, and 24 have legalized it for recreational use.
The lesson here is pretty straightforward. As Tenth Amendment Center Executive Director Michael Boldin noted, “When enough people say, ‘No!’ to the federal government, and enough states pass laws backing those people up, there’s not much the feds can do to shove their so-called laws, regulations, or mandates down our throats.”
The passage of AB1775 demonstrates another important reality. Once a state puts laws in place legalizing cannabis, they tend to eventually expand. As the state tears down some barriers, markets develop and demand expands. That creates pressure to further relax state law. This bill represents a further erosion of unconstitutional federal marijuana prohibition. It also demonstrates an important strategic point. Passing bills that take a step forward sets the stage, even if they aren’t perfect. Opening the door clears the way for additional steps. You can’t take the second step before you take the first.
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