The proposal could create new opportunities for cannabis businesses by allowing customers to consume cannabis on-site while also enjoying food, beverages and live entertainment.
At Green Door SF in the South of Market neighborhood, General Manager Eli Abitan said the change is something operators have wanted for years.
"It's something we always dreamt of and hoped for," Abitan said.
Under the legislation, existing cannabis retailers could apply for permits to operate cannabis cafes. Businesses, such as Green Door SF, which currently operates a dispensary and event space, could convert portions of their facilities into lounges where customers can smoke or vape cannabis.
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"I think people want it," Abitan said.
"We can invite and promote our lounge. We can serve food here," he said. "Then it will be open every day and be able to cater to people."
Cannabis business owners say the industry has struggled with rising costs and taxes, making new revenue opportunities especially attractive.
"I think it's a great opportunity for dispensaries to further thrive. The whole market has completely imploded," said Green Door SF Owner Michael Nolin. "Taxes are really impeding on businesses."
Supporters of cannabis cafes say they would provide designated spaces for consumers.
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"It does give consumers better opportunity to enjoy. They won't have to be out on the streets. They don't have to be in a hotel where there's no smoking," Nolin said. "They can have like-minded individuals around them."
Other cannabis operators are also preparing for the possibility of opening cafes.
William Dolan, CEO of Hyrba Dispensary, said the company plans to open a cannabis cafe on Van Ness Avenue. Hyrba currently operates a retail store on Judah Street in San Francisco's Sunset District.
"I think it's a win-win for the existing industry. I think it's a win for the city and state," Dolan said. "I think it's a really big positive benefit for tourism. It'll be a draw for the city of San Francisco."
Supporters also see cannabis cafes as part of broader efforts to attract visitors and support local businesses.
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Supervisor Rafael Mandelman, who supports the legislation, said in a statement: "Cannabis cafés are part of this city's recovery, right alongside our entertainment zones, neighborhood activation, and free concerts..."
Abitan expressed optimism about the proposal's future.
"I'm ecstatic. And I'm really really looking forward to that happening," he said.
The legislation still requires Mayor Daniel Lurie's signature. If signed, the ordinance would take effect 31 days later.
Critics have raised concerns about the effects of secondhand smoke. Supporters of the measure say cannabis cafes would include thorough ventilation systems.