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Key Takeaways
- San Francisco’s Board of Supervisors voted 7-4 to approve an ordinance for cannabis cafes serving food and entertainment alongside cannabis consumption.
- The ordinance allows existing licensed retailers to expand services and aims to boost revenue for the struggling legal cannabis industry.
- Only current cannabis retailers can apply for the new cannabis cafe permits for the first year, fostering a controlled transition.
- The ordinance requires cafes to adhere to food safety standards and prevents the sale of alcohol or tobacco.
- Public health advocates opposed the measure, citing health risks from secondhand smoke and urging caution in expanding cannabis permits.
San Francisco’s Board of Supervisors voted 7-4 on July 14th, to approve an ordinance allowing licensed cannabis retailers to serve food, non-alcoholic beverages, and live entertainment alongside on-site cannabis consumption. The measure, authored by Board President Rafael Mandelman, makes San Francisco the first Bay Area city to permit cannabis cafes under California’s AB 1775, signed into law in 2024.
San Francisco’s legal cannabis industry has had a rough few years. High taxes, falling wholesale prices, and an illicit market that the state estimates accounts for roughly 60% of all cannabis sold in California have left many licensed retailers struggling to stay open. According to the San Francisco chapter of the Brownie Mary club, 23 cannabis retail storefronts and 21 delivery services have already closed since the city began issuing permits.
The cannabis cafe ordinance is designed to change that. By letting existing retailers expand into food, beverages, and entertainment, city leaders hope to create new revenue streams without waiting for broader market conditions to improve.
The ordinance now heads to Mayor Daniel Lurie for his signature. If signed, it takes effect 31 days later, at which point the San Francisco Office of Cannabis will begin accepting cafe permit applications.
What Does the San Francisco Cannabis Cafe Ordinance Actually Do?
The ordinance, introduced by Board President Rafael Mandelman, amends San Francisco’s Health, Planning, Police, and Business and Tax Regulations Codes. At its core, it creates a brand-new permit category specifically for cannabis cafes, separate from the standard cannabis retailer license.
Before this ordinance, dispensaries could allow customers to consume pre-packaged cannabis edibles on-site, but they could not serve regular food or drinks. That restriction is now lifted for permit holders. Cafes will be able to prepare and sell both infused and non-infused food and beverages, as well as host live entertainment.
One key distinction: a cannabis cafe permit holder is explicitly not classified as a “cannabis retailer” under the amended code. That means cafes can only sell cannabis for on-site consumption. Nothing leaves the building.
Who Can Apply for a Cannabis Cafe Permit in San Francisco?
For the first year after the ordinance takes effect, eligibility is intentionally narrow. Only businesses that currently hold a cannabis storefront retailer permit, or that share all of the same owners as a business that does, may apply. Mandelman said this was to give existing operators a fair shot at new revenue before the market opens to new entrants.
After that first year, new operators may apply. However, no individual holding a legal or beneficial interest in an applicant can hold interest in four or more cannabis cafe permits or pending applications. Application fees are set at $2,000, with a $3,000 license fee for the first year of operation.
San Francisco has issued 79 cannabis retailer permits, 66 of which were active as of earlier this year.
What Are the Operating Rules Inside a San Francisco Cannabis Lounge?
Cannabis cafe operators must carry both a Department of Public Health consumption permit and an Office of Cannabis permit. They must meet the same food safety standards required of any restaurant under California’s Retail Food Code.
Age verification at the door must be done electronically. No alcohol or tobacco is permitted on the premises. Cafes must comply with ventilation and signage requirements and follow visibility rules that minimize smoke transmission.
The 600-foot buffer rule, which typically prevents cannabis retailers from operating near each other, includes a narrow exception. A cannabis cafe may be located within 600 feet of a storefront retailer if it shares the same ownership, provided no other commonly owned cafe is already within that radius.
Why Did Some Supervisors and Health Groups Vote Against the Bill?
The vote was 7-4, and the opposition raised two distinct concerns.
The first came from public health advocates. The American Lung Association and the American Cancer Society Cancer Action Network both sent letters urging a “no” vote. Kesa Bruce, the Lung Association’s advocacy director, wrote that ventilation “cannot eliminate the health risks associated with secondhand smoke” and argued that no worker should have to choose between a paycheck and their health. Supervisor Myrna Melgar, one of four supervisors who voted against the measure, echoed that view, calling indoor cannabis smoke “a serious public health issue.”
The second objection came from inside the cannabis industry itself. Kevin Reed, founder of The Green Cross and a 20-year veteran of San Francisco cannabis policy, urged the board to permanently limit cafe permits to existing retailers rather than eventually opening the market to new applicants. David Goldman of the Brownie Mary club supported adding food and entertainment to existing shops but opposed the new license category in what he described as an already oversaturated market. Goldman asked the board to wait for a city economic impact report due by mid-2027 before expanding who could apply.
How Did the State Law Behind This Ordinance Come Together?
The San Francisco ordinance implements California Assembly Bill 1775, signed by Governor Gavin Newsom in September 2024. AB 1775 was authored by Assemblymember Matt Haney, a Democrat from San Francisco and former member of the Board of Supervisors.
The road to that bill was not straightforward. Newsom vetoed an earlier version in 2023, citing insufficient protections for workers exposed to secondhand smoke. Haney revised the legislation to require businesses to provide N95 masks or equivalent respirators to workers who request them, and to include smoke exposure risks in health and safety disclosures to employees, insurers, and regulators. That revised version cleared the governor’s desk in 2024.
“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 following the San Francisco Board’s vote.
What Happens Next Before San Francisco Cannabis Cafes Open?
The ordinance still requires Mayor Daniel Lurie’s signature before it becomes law. If Lurie signs it, the ordinance takes effect 31 days later. At that point, the Office of Cannabis will begin accepting applications from eligible businesses.
Operators should expect to secure both a Department of Public Health consumption permit and an Office of Cannabis cannabis cafe permit before opening. They will also need to build out or retrofit their spaces to comply with ventilation, signage, and food safety requirements, while keeping cannabis consumption areas within visibility and smoke transmission guidelines.
The city will release its economic impact report on the cannabis industry by mid-2027, which may determine whether officials adjust the permit framework for new applicants entering after the first year.
Frequently Asked Questions
The Board of Supervisors approved an ordinance creating a new cannabis cafe permit category, allowing retailers to serve food, non-alcoholic drinks, and live entertainment on-site, pending the mayor’s signature.
California’s AB 1775, signed by Governor Newsom in September 2024, allows local governments to issue cannabis cafe licenses. San Francisco has since adopted the bill at a local level. Assemblymember Matt Haney introduced the bill after Newsom vetoed an earlier version in 2023 over worker health concerns.
No. For the first year after the ordinance takes effect, only existing cannabis storefront retailers and their equity partners may apply. After that initial period, new operators become eligible. No individual can hold an interest in four or more cannabis cafe permits or pending applications.
Cannabis cafes in San Francisco must follow specific operational requirements. Operators can only sell and permit cannabis consumption on-site. They must ban alcohol and tobacco entirely. Additionally, operators must electronically verify customer ages at the door and meet standard restaurant food safety requirements. Finally, businesses need permits from both the Office of Cannabis and the Department of Public Health.
