William Dolan had been waiting for years. His quest to open a cannabis storefront at 560 Valencia St. had stretched out almost 10 years. As he waited, other cannabis businesses saturated the market. He struggled to pull together the financing to build out the space and open for business.\u00a0<\/p>\n
An ordinance signed last week by Mayor Daniel Lurie changed all that. Dolan is now on track to open one of San Francisco\u2019s first cannabis caf\u00e9s \u2014\u00a0possibly the first.<\/p>\n
The ordinance introduced in March by District 8 Supervisor and board president, Rafael Mandelman, implements Assembly Bill 1775, a 2024 state law that opened the door to Amsterdam-style cannabis caf\u00e9s across California. San Francisco is, so far, the first city in the Bay Area to take the next step and actually amend the planning code to allow such caf\u00e9s to open.<\/p>\n
Dolan, a real estate advisor and owner of Hyrba, a cannabis dispensary in the Sunset, made an educated gamble that the ordinance would pass. He filed an application to add a limited restaurant to the storefront in November of 2025, about four months before Mandelman introduced the ordinance. But he also had advocated in the past for legalizing cannabis caf\u00e9s with Assemblymember Matt Haney (D-San Francisco), who authored the state legislation, and Mandelman.\u00a0<\/p>\n
Dolan said that he made himself available as a resource to legislators and regulators by helping inform throughout the legislative process and by advocating at state and local level.<\/p>\n
If it hadn\u2019t passed, though, he said, he would\u2019ve been at real risk of losing the project \u2014\u00a0the cafe aspect, he said, is what makes his project stand out.\u00a0\u00a0<\/p>\n
That assessment is echoed by Cann Intel, which wrote<\/a> that between 2020 and 2025, the profit margins reported by San Francisco dispensaries had, on average, fallen from 20% to 10%. \u201cConsumption lounges can command premium pricing,\u201d the article continued. \u201cEarly projections suggest $45-75 per person average spend versus $65-85 for traditional retail transactions.\u201d<\/p>\n In a press release Mandelman, who also successfully sponsored legislation to suspend the city\u2019s cannabis tax until 2036<\/a>, described the caf\u00e9s as a boon to the city\u2019s tourism economy. \u201cCannabis caf\u00e9s are part of this city\u2019s recovery, right alongside our entertainment zones, neighborhood activation, and free concerts, and today\u2019s vote makes sure our legal retailers aren\u2019t left behind. Amsterdam draws real tourism dollars from its cannabis caf\u00e9s, and while San Francisco isn\u2019t Amsterdam, there\u2019s no reason our operators shouldn\u2019t have the same tools to compete and help bring people back into our neighborhoods.\u201d<\/p>\n The race is on<\/p>\n It takes 31 days after the mayor\u2019s signature for a policy legislation to become law. Dolan said that if everything goes well securing his permits, he could start construction by the beginning of September, and open summer of next year.<\/p>\n The trade journal Cann Intel estimates <\/a>that, now that the ordinance has passed, 12-18 cannabis caf\u00e9s will open in San Francisco by mid-2027, concentrated in the Mission, SoMa, and Haight-Ashbury.\u00a0<\/p>\n The city\u2019s Office of Cannabis has issued 79 cannabis retail permits citywide, of which 66 were active as of earlier this year<\/a>. Currently, seven of those active permits are in the Mission \u2014\u00a0Dolan\u2019s, which is processing, would bring that number up to eight.\u00a0<\/p>\n Most of the existing cannabis shops are within five to eight blocks of Dolan\u2019s future cafe and the intersection of 16th and Mission, which has a large concentration of smoke shops<\/a> that were grandfathered in before newer city regulations required such stores to be located farther apart from each other. Some studies have found that areas with large concentrations<\/a> of smoke shops are likely to also attract cannabis dispensaries, and that those areas tend to be more low-income<\/a>.\u00a0 The Castro currently has three cannabis retailers and Sophie Marie, a legislative aide to the board president, said Mandelman would be open to cannabis caf\u00e9s coming to his district.<\/p>\n A long journey<\/p>\n A cannabis caf\u00e9 has been a dream for Dolan since he visited Amsterdam for the first time in 1997, he said. From that moment on, he dreamed of creating something similar in the United States.<\/p>\n Getting there has been a long journey. In 2018, Dolan applied for a cannabis business permit with San Francisco\u2019s Office of Cannabis. Dolan settled on 560 Valencia St as a location \u2014\u00a0which had been purchased from Donald R Fried by Hire Valencia LLC in 2019. Dolan managed the property, and made plans to move in once the lease for the space\u2019s then tenant, furniture retailer Blu Dot, ended in 2021.\u00a0<\/p>\n In February 2020, the first phase of their application was approved, and in June of 2020, Dolan began to hold community outreach meetings<\/a> about opening a \u201ccannabis equity marketplace\u201d at 560 Valencia St.\u00a0<\/p>\n 50 percent of licenses were set aside for \u201cequity applicants<\/a>\u201d \u2014\u00a0or those who partnered with them. Dolan said he already met the conditions to qualify as an equity applicant himself.\u00a0<\/p>\n Some neighbors supported Dolan\u2019s proposal. Others did not, arguing that the neighborhood was already over-saturated with dispensaries. Dolan created a nine-member committee to advise him and signed a list of commitments drafted by the committee<\/a> promising to prioritize the hiring of local employees, people with disabilities, and those arrested for non-violent marijuana-related charges.<\/p>\n Dolan also committed to paying employees a minimum of $20 an hour, and to setting aside a 328-square-foot area within the 5,000 square foot space where local entrepreneurs could sell their cannabis products for free for the first three years.<\/p>\n