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Newsom Vetoes More Bills, Including Bill That Would Have Legalized Cannabis Cafes

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A person in a suit and ties speaks and gestures with their hands.
California Gov. Gavin Newsom speaks during an interview with Politico in Sacramento on Sept. 12, 2023. Newsom said the state will intervene in an ongoing federal court case that has barred San Francisco from cleaning up homeless encampments. (Rich Pedroncelli/AP Photo)

This is a breaking story that will be updated as more information becomes available.

Governor Gavin Newsom vetoed another round of bills this weekend, including one that would’ve legalized Amsterdam-style cannabis cafes in California. The bill would have allowed cannabis dispensaries — with permission from local governments — to transform their businesses into cafes where food and cannabis products could be sold, and live concerts could be hosted.

While it is currently not illegal in California for customers to smoke or consume cannabis on-site in consumption lounges, it is illegal for dispensaries to sell non-cannabis products like coffee or food. AB 374 had bipartisan support in both of the state’s legislative houses, passing in the Assembly with a final 66–9 vote and passing the Senate with a 33–3 vote.

Assemblymember Matt Haney introduced AB 374 earlier this year, which he said would bolster the struggling retail cannabis market. In 2020, California’s legal cannabis sales reached $4 billion, while illegal sales are believed to have surpassed $8 billion that same year.

“It’s really about fairness and supporting businesses that follow the rules,” said Haney in a press release. “If we keep allowing unnecessary regulations to strangle California’s legal cannabis businesses, we’re just encouraging illegal drug sales and all of the problems that come with that.”

In his veto message, Newsom said he worried the bill conflicted with California’s smoke-free workplace protections but “appreciates the author’s intent to provide cannabis retailers with increased business opportunities.”

Voters legalized the on-site smoking of cannabis in licensed dispensaries in 2016 with Proposition 64. It’s illegal to smoke cannabis outdoors as well as in all public places, apartment buildings, and automobiles. Without on-site smoking being allowed in dispensaries, it would be functionally illegal statewide for anyone other than homeowners and their guests to smoke.

In the 1970s, the Netherlands legalized cannabis cafes in order to deprive the illegal cannabis market of revenue. The approach was a success and created a thriving tourist industry. According to Haney, while the country is ten times smaller than California, the Netherlands has more than 700 cannabis cafes where tourists spend over $1 billion every year.

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The slew of bills vetoed over the weekend included AB 881 from Assemblymember Phil Ting that would have expanded on a San Francisco pilot program to pay jurors with lower-income $100 for each day of service. Newsom cited budget concerns as the reason for the veto.

The governor also vetoed AB 1536, a bill that would have expanded state benefits to all aged, blind, or disabled immigrants in California, regardless of immigration status. The Cash Assistance Program for Immigrants (CAPI) is a state-funded program designed to provide a monthly cash benefit to vulnerable seniors and disabled immigrants who are ineligible for federal Supplemental Security Income/State Supplemental Programs (SSI/SSP) due to their immigrant status.

The bill was introduced by Assemblymember Juan Carrillo of Palmdale earlier this year, who said at the time it would help the state’s aging undocumented population — many of whom have no retirement — age with dignity. In his veto message, Newsom said he supports the goal of the bill, but said it wouldn’t be prudent to approve the policy without providing funding.

This story features reporting from KQED’s Dana Cronin and Rachael Vasquez.

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