San Francisco may become the first city in the Bay Area to license cannabis cafes that will allow consumers to enjoy food, beverages, and live entertainment while they smoke and vape onsite. The final passage of the ordinance at Tuesday’s Board of Supervisors meeting came after about a year of haggling by the local measure’s author, District 8 Supervisor Rafael Mandelman, and follows an even lengthier effort at the state level to allow the cafes. The ordinance still needs the signature of Mayor Daniel Lurie before it becomes law. The rule will allow businesses that are already licensed to produce, process or sell cannabis to offer food and beverages to be consumed onsite after obtaining a permit from the Department of Health but will not allow regular restaurants, bars or cafes to start offering cannabis products. Four supervisors opposed the measure, including Myrna Melgar, who said she liked the idea but would not support rolling back what she said was progress on smoke-free indoor spaces and workplaces. “I think that indoor smoke whether it’s cannabis or tobacco is a serious public health issue,” she said during the first vote on the ordinance last week. Besides Melgar, Supervisors Alan Wong, Chyenne Chen, and Connie Chan also voted against the move. The inclusion of more protections for workers was one of the reasons Gov. Gavin Newsom originally opposed the idea, vetoing a state bill in 2023 that would have allowed the cafes, which often evoke comparisons to businesses in Amsterdam that are popular with tourists and cannabis users looking to socialize. Newsom eventually signed a revised version in 2024, Assembly Bill 1775, that added protections for workers’ health. The first bill, and its successor, was authored by Assemblymember Matt Haney, D-San Francisco. After the first one was vetoed, Haney added provisions for businesses to provide N95 or other masks for workers who requested them and for business owners to identify the risk of smoke exposure in health and safety materials to employees, insurers and health regulators. Haney, who is also a former member of the Board of Supervisors, said he hoped the businesses would also spur an increase in nightlife activity. “Cannabis cafes were always about giving people a place to enjoy legal cannabis in the company of others while supporting small businesses, nightlife, and local culture,” Haney said in a statement. “This is exactly what we envisioned when I authored the bill to make it possible for cities to legalize cannabis cafes, and it’s exciting to see San Francisco lead the way in making that vision a reality.” Current rules in the city allowed onsite consumption of packaged cannabis edibles in permitted dispensaries but not regular food and drinks such as sodas or pastries that aren’t infused with cannabis. The new lounges and cafes will allow food and beverages to be prepared and sold onsite, including products infused and not infused with THC, the psychoactive compound in cannabis that gives users the feeling of intoxication. Unlike Amsterdam, San Francisco’s onsite consumption lounges will not be permitted to sell alcohol. The city has 66 active licenses for retail cannabis stores. Only existing businesses will be allowed to apply for a permit for the new consumption spaces for a period of one year, which Mandelman said was to give them a fair chance to create new revenue streams after struggling through a tough economic environment. The state eliminated several taxes and fees on the product following a steep drop in prices in 2021. Mandelman led a previous effort to suspend the city’s business tax on cannabis stores for 10 years to try to stabilize the market. William Dolan, CEO of HYRBA Dispensary, in the Sunset District, said he looked forward to transforming the cannabis business into a more hospitality-focused enterprise. “This legislation clears a path for our industry to create a full-service cannabis hospitality experience, diversify our businesses, and provide our customers with safe, highly regulated spaces where they can enjoy food and beverages alongside responsible cannabis consumption,” Dolan said in a statement. ...read more read less