What is AB 1775 and AB 1111 law in California? (Updated Version)

by Adan Perez
Sep 08, 2024

Introduction

On August 28, 2024, the California Legislature passed two groundbreaking bills—AB 1775 and AB 1111—that could profoundly reshape the state’s cannabis landscape and offer cannabis businesses another opportunity to reach a new customer demographic. AB 1775 aims to introduce Amsterdam-style cannabis cafes, while AB 1111 seeks to empower licensed cultivators by allowing direct-to-consumer sales at cannabis licensed events. These bills, currently awaiting Governor Gavin Newsom’s signature, represent a significant milestone in California’s ongoing efforts to regulate and diversify its cannabis industry.

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Key Takeaways

Introduction of Cannabis Cafes: AB 1775 would legalize Amsterdam-style cannabis cafes in California, offering consumers a new social environment for cannabis consumption.

Support for Small Producers: AB 1111 empowers small cultivators by allowing direct-to-consumer sales at licensed events, fostering the growth of California's craft cannabis market.

Worker Protections: AB 1775 includes stringent measures to ensure a safe and healthy environment for workers in cannabis cafes, addressing prior concerns raised by Governor Newsom.

Regulatory Challenges: Both bills face significant opposition from various stakeholders, highlighting the complexities and potential impacts of these legislative changes on the broader cannabis market.
New Update: Governor Gavin Newsom has Vetoed AB:1111 on September 29, 2024

Overview of AB 1775 and AB 1111

AB 1775 is designed to create cannabis cafes where patrons can consume cannabis in a social setting, accompanied by food, coffee, and live entertainment. This initiative, spearheaded by Assemblymember Matt Haney, revisits previous attempts at establishing such cafes, this time with built-in worker safety protections to address concerns from Governor Newsom.

AB 1111 introduces a new small producer event sales license, specifically aimed at supporting small cannabis cultivators by enabling them to sell their products directly to consumers at state-licensed cannabis events. This bill is seen as a critical step toward nurturing California's craft cannabis sector, although it faces opposition from larger, more established retailers.

The Origins and History of Cannabis Cafes

Cannabis cafes, also known as "coffeeshops," first emerged in the Netherlands, in the city of Amsterdam during the 1970s. The Bulldog, which opened its doors in 1975, became the pioneering model for these establishments. These cafes provided a unique blend of legal cannabis consumption with a vibrant social atmosphere, often featuring coffee, food, and live entertainment. The Dutch government's progressive drug policy, which tolerated the sale and consumption of small amounts of cannabis, allowed these cafes to flourish, making Amsterdam a global icon of cannabis culture. AB 1775 seeks to bring this concept to California, adapting it to local laws and ensuring worker safety, which has been a significant concern in the state.

Also Read:

Navigating the Changing Legal Landscape of Cannabis Use: Understanding local cannabis laws is crucial, as regulations vary widely across states and countries, impacting users, cultivators, and businesses differently.

Impact of AB 1775: Amsterdam-Style Cannabis Cafes

The passage of AB 1775 could revolutionize the cannabis retail experience in California by permitting cannabis cafes that offer more than just cannabis products. These establishments would provide patrons with a social space to consume cannabis, while also enjoying food, beverages, and entertainment, creating a multifaceted business model that goes beyond the traditional dispensary. Worker protections, such as improved ventilation systems and designated smoking areas, are integral to this bill, reflecting the state’s commitment to balancing business innovation with health and safety standards. The introduction of cannabis cafes could significantly enhance the cultural and social dynamics of cannabis consumption in California, making it a more integrated part of the state’s lifestyle and economy.

Impact of AB 1111: Direct-to-Consumer Sales at Cannabis Events

AB 1111 represents a significant shift in how cannabis products can be marketed and sold in California. By allowing small cultivators to sell directly to consumers at licensed events, this bill aims to empower small-scale producers, offering them a platform similar to that enjoyed by small-scale wine or coffee producers. The bill's provisions include specific limits on sales revenue and cultivation size to ensure that only small producers benefit from these new opportunities. By fostering a more equitable marketplace, AB 1111 could play a vital role in the development of California’s craft cannabis industry, allowing small producers to thrive despite the competitive pressures from larger, more established companies.

Challenges and Opposition

The journey of both AB 1775 and AB 1111 through the legislative process has not been without hurdles. AB 1111, in particular, has faced strong opposition from established cannabis retailers, who argue that the bill could disrupt the existing retail market by giving an unfair advantage to small producers. Additionally, there are concerns about the potential logistical challenges of implementing these direct-to-consumer sales, particularly at large events. Meanwhile, AB 1775 must carefully balance the creation of new social consumption spaces with the need to protect workers from the health risks associated with secondhand cannabis smoke. These challenges highlight the complexities of regulating a rapidly evolving industry, where the interests of various stakeholders must be carefully balanced to ensure both innovation and compliance.

New Recent Update

Governor Gavin Newsom recently vetoed Assembly Bill 1111, which aimed to create a new type of cannabis sales license for small producers. The bill would have allowed these producers to sell their cannabis directly to consumers at temporary events for up to 32 days per year, with the requirement that all products sold must be cultivated by the licensee.

In his veto message, Newsom expressed concerns about the bill's broad eligibility that could undermine the state's current retail licensing framework. He's worried that it would place "too much strain" on the Department of Cannabis Control's capacity to enforce regulations and compliance. Although Newsom's acknowledged of the intent to support small and equity cannabis cultivators, he suggested that a more focused version of the bill could be considered in the future, that better aligns with broader market dynamics and addresses the fundamental challenges in the legal cannabis industry, such as competition from the unregulated market and improving access to regulated products.

While I appreciate the author's intent to support small and equity cannabis cultivators, I am concerned that the bill's broad eligibility, which extends to the vast majority of licensed cultivators, would undermine the existing retail licensing framework and place significant strain on the Department of Cannabis Control's ability to regulate and enforce compliance. - Governor Gavin Newsom

Frequently Asked Questions (FAQs)

1. What is AB 1775?

AB 1775 is a bill that proposes the creation of cannabis cafes where patrons can consume cannabis while enjoying food, beverages, and entertainment in a social setting.

2. What is AB 1111?

AB 1111 introduces a small producer event sales license, enabling small cannabis cultivators to sell directly to consumers at licensed cannabis events across California.

3. How does AB 1775 protect workers?

The bill includes comprehensive measures such as advanced ventilation systems and designated smoking areas to ensure that cannabis cafes provide a safe and smoke-free environment for their employees.

4. Who qualifies as a "small producer" under AB 1111?

A small producer is defined by stringent cultivation size limits and is allowed to generate up to $175,000 in gross sales annually at events, with future adjustments possible based on inflation and market conditions.

5. Why is AB 1111 facing opposition?

Established cannabis retailers are concerned that the bill could disrupt the existing retail market by providing small producers with a competitive advantage in direct-to-consumer sales.

6. What is the significance of cannabis cafes?

Cannabis cafes offer a unique social environment for cannabis consumption, drawing inspiration from the successful model of Amsterdam’s coffeeshops, which have been a cultural mainstay since the 1970s.

7. When will these bills take effect?

Both AB 1775 and AB 1111 are awaiting Governor Newsom’s decision. If signed into law, their implementation will occur over the coming years, with specific timelines for each bill.

Conclusion

The potential enactment of AB 1775 and AB 1111 could herald a new era for California’s cannabis industry. By introducing Amsterdam-style cannabis cafes and enabling direct-to-consumer sales at licensed events, these bills aim to diversify the market and support small businesses, especially within the craft cannabis sector. However, the successful implementation of these initiatives will depend on how effectively the state can address the regulatory and logistical challenges presented by both bills. As California continues to be a leader in cannabis innovation, these legislative changes could significantly influence the future of cannabis consumption and sales, not only within the state but potentially setting a precedent for other regions to follow.

Udated Response to AB: 1111
After reading Governor Newsom's veto message, it seems like he is open to considering a new version of the bill next year, but it needs to be simple and focused on helping the cannabis market in a better way. He beleives it's important to fix bigger problems in the cannabis industry first, like making sure legal businesses can compete fairly and helping people get access to safe, regulated products. Instead of making things harder for businesses with too many rules, he wants to find solutions that make the legal market stronger without adding more stress. Only time will tell.

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