California Governor Gavin Newsom last week vetoed a bill that would have allowed cannabis cafes to offer weed, food and beverages to patrons at licensed establishments reminiscent of the famed coffee shops in Amsterdam. The measure, Assembly Bill 374 (AB 374), was passed by the California legislature last month after being introduced earlier this year by Democratic Assemblymember Matt Haney.

Under current California law, cannabis consumption lounges cannot sell freshly prepared food to their patrons. A rule change adopted in November of last year allows lounges to offer prepackaged food and beverages and for customers to bring their own freshly prepared items on a limited basis, but the businesses themselves are denied the opportunity to serve most non-infused products to their customers.

Haney’s bill would have allowed California’s cannabis consumption lounges to sell freshly prepared food and drinks and to host live entertainment events. In the Netherlands, more than 700 cannabis cafes, often referred to as coffee shops, draw 1.5 million visitors per year, according to information from Haney’s office. Allowing the state’s consumption lounges to operate under a similar business model would give the businesses new economic opportunities and could serve as a draw for tourists and locals to visit struggling downtown business districts.

“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 scone, or listening to music,” Haney said in a statement. “There’s absolutely no good reason from an economic, health, or safety standpoint that the state should make that illegal. If an authorized cannabis retail store wants to also sell a cup of coffee and a sandwich, we should allow cities to make that possible and stop holding back these small businesses.”

But on Saturday, Newsom vetoed AB 374, although the governor said he appreciates “the author’s intent to provide cannabis retailers with increased business opportunities and an avenue to attract new customers.” In his veto message, Newsom said he was concerned that the bill conflicted with California legislation to provide a smoke-free workplace for all workers.

“Protecting the health and safety of workers is paramount. I encourage the author to address this concern in subsequent legislation,” the governor added. “For this reason, I cannot sign this bill.”

Sponsor Promises New Bill Next Year

After Newsom vetoed the bill, Haney decried the move in a statement on social media, saying that the bill is needed to help support California’s regulated cannabis industry, which continues to face challenges including high costs and competition from the state’s pervasive unlicensed operators.

“The bill was widely seen as an attempt to level the playing field for the highly taxed and regulated legal cannabis industry that is being forced to compete in California with a thriving cannabis black market,” Haney said. “The illegal sale of cannabis is extremely profitable in California with illegal sellers choosing to simply ignore costly regulations, product testing, permitting, and taxation. California’s legal cannabis sales reached $4 billion in 2020, while illegal sales are believed to have surpassed $8 billion that same year.”

Haney added that voters have already authorized smoking in the businesses covered by the bill and vowed to draft new legislation to legalize cannabis cafes in the next legislative session.

“The voters of California have already decided to legalize the smoking of cannabis in public dispensaries. AB 374 just allows businesses where smoking is already happening to sell coffee and food and hold live shows,” Haney wrote on X, the social media platform formerly known as Twitter. “I appreciate and respect the Governor’s concerns about worker’s health. And I’m looking forward to working closely with his office and with labor leaders to make sure we get this right when I introduce the bill again next year.”

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The Netherlands government recently confirmed that it plans to start its pilot program on December 15 later this year. “The most recent planning shows that two legal growers are expected to be ready for delivery to coffee shops in the fourth quarter of 2023,” the Dutch government wrote. “This is sufficient to start the start-up phase of the experiment in Breda and Tilburg. In this phase, participating coffee shops from these municipalities may offer both legally grown and tolerated products. The next two growers are expected to start supplying coffee shops in Breda and Tilburg in February 2024.” Breda and Tilburg are located in the southern part of the country, near the border of Belgium.

The timeline for this program begins with a “start-up phase” that will last up to six months. “The initiative for the start-up phase was introduced by the mayors of Breda and Tilburg and embraced by Minister Ernst Kuipers of Health, Welfare and Sport and Minister Yeşilgöz-Zegerius of Justice and Security as an opportunity to start the experiment on a small scale around a legalized production and sales chain,” the government wrote.

The start-up phase is described as a sort of warm up time frame for businesses to adjust to the program, however the government notes that if “public order or safety is seriously threatened,” then they will stop the program prematurely. “The insights will be shared with all participating municipalities and used to improve processes and systems for a smooth transition phase,” the government stated.

After the start-up period ends, then the “transition phase” begins. “It is expected that all participating municipalities will be able to start the transition phase at the earliest at the end of the first quarter of 2024,” the government wrote. “In this transition phase, coffee shops in the participating municipalities may offer regulated products in addition to tolerated products.”

According to Forbes, there will be a six-week period where coffee shops can continue to obtain their cannabis products from illegal sources “while the new legal suppliers are phased in.” Following the transition phase, the experimental phase will begin. “From that moment on, participating coffee shop owners may only sell regulated cannabis,” the government added.

The Netherlands announced its plans for the pilot program years ago, and was intended to begin in 2020, but was delayed until 2022. In March 2022, the program received another delay, expecting the program to begin in Q2 2023. “Unfortunately, it has now become apparent that starting in 2022 is no longer realistic,” the letter stated last year. “The selection procedure of the remaining growers is taking longer than expected, and some growers are having trouble securing a location.”

Breda Mayor Paul Depla explained his disappointment that the program continued to be delayed. “It is clear that everyone who is in favor of the cannabis test is disappointed,” said Depla. Tilburg Mayor Theo Weterings also echoed his frustration. “Again delay—how much more can you delay. We expect that some MPs will now be scratching their heads, wondering: what is happening here?”

The Netherlands has never legalized cannabis, although it has long been associated with its “soft drugs” policy, called gedoogbeleid, which allows cannabis business owners to sell their product at coffee shops without being prosecuted. “Dutch coffeeshop policy has long been a subject of public debate. At the heart of the debate is the ambiguous status of cannabis: while the sale and use of cannabis for recreational purposes are tolerated, production and distribution are strictly prohibited,” the Netherlands government stated. “Under the current policy of toleration, selling and using are still criminal offences under Dutch law, but the authorities choose not to pursue or prosecute lawbreakers.”

Due to this policy, the number of coffee shops increased drastically. In 2007, data from Statista shared that an estimated 229 coffee shops were operating within the city of Amsterdam. The most recent data shows that 166 shops were operating, as of 2020. The Netherland government estimates that 570 coffee shops operate across the country’s 102 municipalities.

Amsterdam banned public consumption of cannabis in April 2018, and more recently a ban was also implemented in the Red Light District in May. The Amsterdam City Council approved the ban earlier in 2023. “Residents of the old town suffer a lot from mass tourism and alcohol and drug abuse in the streets,” the city council explained. “Tourists also attract street dealers who in turn cause crime and insecurity. The atmosphere can get grim especially at night. People who are under the influence hang around for a long time. Residents cannot sleep well and the neighborhood becomes unsafe and unlivable.” The city council added that the ban would “reduce nuisance.”

The Netherlands isn’t the only country to start implementing cannabis pilot programs. Fellow European Union (EU) country of Luxembourg, which recently legalized cannabis for personal use in June, began a pilot program to test out legal access to cannabis. Switzerland, which is not a part of the EU, began its own cannabis pilot program in January 2023.

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