Matt Haney recently introduced Assembly Bill 374, which would allow cannabis retailers in California to operate kitchens and host live events at their stores. The bill aims to remove some of the most significant restrictions on cannabis consumption lounges. It would permit dispensaries to serve prepared foods and coffee, as well as host live entertainment.
California’s strict regulations currently make revenue generation at consumption lounges challenging for licensees, as they are prohibited from preparing and serving food and beverages in-house. Instead, they must rely on third-party providers to handle these tasks. Most consumption lounges in California today function primarily as cannabis smoking rooms. Some have partnerships with local cafes and restaurants to deliver food and beverages to consumers in the lounge, typically ordered virtually. However, by delegating food and beverage services to third-party providers, dispensaries lose potential revenue on every sale.
If passed, this bill could open many doors for businesses in the cannabis industry looking to expand their operations. It’s important to note, however, that this bill does not allow coffee shops to sell cannabis—it only allows cannabis shops to sell coffee. This change primarily benefits cannabis dispensaries looking to expand their services to include food, beverages, and entertainment.
Currently, California has a few dozen cannabis consumption lounges, most of which are located in the Bay Area. The success of these lounges highlights the revenue opportunities for businesses that leverage the changes introduced by AB 374. Overall, the bill has the potential to bring in additional revenue for cannabis dispensaries by expanding their service offerings.
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