Week in Review: Cannabis Cafés Coming to California

In this week’s cannabis news round-up, California’s bill permitting cannabis cafés advances to Governor Newson for final approval; New York launches wider cannabis licensing in October; and Massachusetts hits record-breaking $5 billion in adult-use cannabis sales.

California Bill Permitting Cannabis Cafés Advances to Governor for Signature

The California Assembly achieved a significant milestone on Monday by passing a bill that would authorize Amsterdam-style cannabis cafés throughout the Golden State. The bill has now advanced to Governor Gavin Newsom (D) for the ultimate green light. Initially introduced by Assemblymember Matt Haney (D-San Francisco) in February, the Assembly’s resounding endorsement came with a 66-9 vote, following last week’s 34-3 approval by the state senate.

While certain cities in California already allow for social cannabis use, including San Francisco and Oakland, they’re prohibited from offering non-cannabis food or beverages alongside cannabis consumption. Under the proposed measure, local jurisdictions would have the authority to grant permission to cannabis retailers to prepare and serve non-cannabis food and beverages. These establishments could also host and sell tickets for live musical performances or other events within the designated area where cannabis consumption is permitted, as outlined in a legislative summary.

Assembly Bill 374 specifies that cannabis retailers cannot sell alcohol or hemp products and any retailer with a suspended license is barred from engaging in activities authorized under the bill. The bill mandates that all non-cannabis food and beverages at the retailer’s premises must be stored and displayed separately from cannabis and cannabis products. A strict no-tobacco-use policy must also be enforced.

New York to Launch Wider Cannabis Licensing in October

New York is gearing up to unlock its cannabis industry applications to the general public, commencing on October 4, extending the opportunity to include existing state medical cannabis enterprises. On Tuesday, September 12, the New York Cannabis Control Board voted in favor of opening up license applications for the cultivation, manufacturing and sale of adult-use cannabis to non-social equity applicants.

The decision clears the path for established multistate operators, including Curaleaf, Acreage Holdings, Columbia Care and Cresco Labs, to venture into what experts anticipate to become the largest cannabis market on the East Coast, with projected revenues reaching $7.07 billion by 2025.

This development follows the recent approval of regulations by the Cannabis Control Board, charting a path for increased participation in the Empire State’s cannabis market. New York’s cannabis industry has faced hurdles due to a slow rollout and a recent lawsuit that effectively halted licensing statewide.

The regulations comprise of a wide array of cannabis-related activities, including plant nurseries, cultivators, processors, cooperatives, distributors, dispensaries, delivery services and microbusinesses. Currently, vertically integrated medical cannabis companies in the state will be obligated to pay a special licensing fee of $20 million to establish three adult-use dispensaries at their existing locations.

Under the measure, existing conditional license holders who follow state regulations have the chance to switch to nonconditional licenses. Application and licensing fees for novel licenses range from $750 to $300,000. Lower fees will apply to social equity applicants to keep within the state’s commitment to promoting diversity and inclusivity within the industry. The regulations don’t include limitations on the number of license types.

Massachusetts Hits $5 Billion in Adult-Use Cannabis Sales

Massachusetts has achieved a remarkable milestone in its adult-use cannabis market, with total sales reaching $5 billion by August 31. This follows a series of record-breaking monthly sales in June, July and August, as reported by the state’s Cannabis Control Commission (CCC). The jump from $4 billion to $5 billion occurred in just eight months, marking the shortest period for Massachusetts businesses to generate an additional $1 billion in gross sales.

“Massachusetts continues to hit record sales even as other states have come online. In fact, our neighboring states Maine, Rhode Island and Connecticut also had record sales this summer,” Executive Director of the Commission, Shawn Collins, said in a statement. “Demand for tested, quality cannabis products remains strong in the region and consumers shopping in other states have not impacted Massachusetts’ success.”

In addition to this impressive sales figure, the CCC also provided insights into the industry’s regulatory landscape. To date, only five cannabis retailers in the state have either surrendered their licenses or allowed them to expire. Similarly, a total of 16 cannabis businesses in various sectors have either had their licenses expire, surrendered them, or faced revocation. Presently, Massachusetts has 317 cannabis retailers, nine delivery couriers, eight delivery operators and one microbusiness equipped with a delivery endorsement.

Adult-use cannabis sales in the Bay State began in 2018 with the passing of Question 4.