Weed consumption lounges not coming to Sacramento for now

A plan to allow marijuana use in lounges in Sacramento has stalled for now but at least one city council member is pushing to revive the idea.

The consumption lounge plan suffered a big defeat Tuesday afternoon when the chairman of the City Council Law and Legislation Committee, Jay Schenirer, refused to discuss the proposal, even though it was part of the committee’s agenda.

“I personally have not heard and have not talked to a lot of council members about this,” he said, “but have not seen a lot of desire to move this item at this point in Sacramento.”

However, Councilwoman Katie Valenzuela, who is also a member of the law and legislation committee, said she plans to ask the full city council at its May 24 meeting to reconsider discussion on the matter, which would send the issue back to the committee.

Valenzuela told The Bee that the consumption lounges, which would be connected to marijuana dispensaries, would offer customers a chance to sample and make choices among a wide variety of products.

She said that would increase business for the dispensaries and sales tax revenue to the city. The councilwoman also said the lounges would be a positive for people who can’t smoke at home, such as a mother with a young child.

“I don’t know if it’s a good idea or not,”she said of the consumption lounges, “I want to have a conversation and think it could be an interesting thing for us to consider bringing to the city.“

Sacramento’s Cannabis Manager Davina Smith had proposed that the council consider the consumption lounges, part of a series of recommendations on how the city regulates dispensaries and other cannabis-related businesses.

In an interview on April 30, Smith compared the consumption lounges to bars, offering a social outlet to smoke with friends in a related atmosphere. She also said lounges could attract tourists, helping boost Sacramento’s economy.

On a visit to a lounge in San Francisco, Smith said management told her it was popular with visitors to the area.

“They told us literally they will get people coming in there with luggage,“ Smith related. “They’ve just got off the plane. People want to experience this.”

Only a handful of consumption lounges exist currently in California, including two in San Francisco and one in West Hollywood, a small city in the Los Angeles metro area known or its nightlife. West Hollywood plans to allow up to 16 consumption lounges.

Another proposal to allow cannabis-related events, such as a comedy or music festival at yet-to-be-determined locations in Sacramento, was also taken off the agenda of Tuesday’s meeting.

Such events are only allowed now at Cal Expo on Exposition Blvd.

Many of the regulation changes, which are expected to be approved by the city council on May 24, deal with ownership rules on dispensaries. They replace the one dispensary per owner rule and allow dispensary owners to take minority interest in other dispensary businesses.

Dispensary owners will also be allowed to transfer up to 99% of the ownership of their business without the new owners going through a new licensing procedure.

Sacramento has 30 dispensaries, but the city council in October 2020 approved allowing another 10 dispensaries to open. None of the additional dispensaries are in business yet..

The new dispensaries are part of the city’s core program in which Sacramento issued permits to individuals affected by the war on drugs. Those 10 permit owners have different ownership rules. They must maintain control of at least 51% of their business for 10 years under existing rules, which are not changing.

The change in ownership regulations or existing owners comes after a city-council imposed moratorium on dispensary permit changes that expires today — May 11. The moratorium dates back to November 2019.

The moratorium came a month after The Bee reported that nine dispensary permits were consolidated with one group of individuals despite the City’s long-standing prohibition on dispensary permit transfers.

A subsequent city audit in Nov. 2020 found that 18 cannabis dispensaries had changed ownership, including the nine reported by The Bee, despite the ban on ownership changes.

All the dispensaries changing ownership had operated as medical cannabis storefronts before recreational marijuana was legalized in California in January 2018.

This story was originally published May 11, 2022 at 11:08 AM.