(NewsNation) — Cannabis consumption lounges may be in California’s future with the passing of a new law Monday.

Assembly Bill 1775 gives cities in the Golden State the option to allow marijuana dispensaries to prepare and serve hot food and nonalcoholic drinks, along with live entertainment.

Marijuana is legal in California, but businesses are restricted to selling prepackaged snacks and drinks. Unlike dispensaries, a lounge or cafe offers a place for customers to stay and smoke while eating or socializing. The city of Amsterdam in the Netherlands has practiced this idea of consuming cannabis in a relaxed public setting like a coffee shop since the 1970s.

“Cannabis cafes are going to be a huge part of the future of cannabis in our state and help to beat back the illegal drug market,” Assemblymember Matt Haney, D-San Francisco, who authored the bill, said to the Los Angeles Times.

Some in the cannabis industry view the bill as a positive for legal shop owners, who say they have struggled to keep up with high taxes and competition from illegal marijuana outlets.

Twelve states already allow local governments to permit on-site marijuana consumption, according to the Marijuana Policy Project, an organization whose mission is to legalize cannabis nationwide. Clark County, Nevada, where Las Vegas is located, legalized cannabis consumption lounges in 2021, but the first consumption lounges did not open until February of this year.

California Gov. Gavin Newsom signed the bill into law after vetoing a similar bill last year over concerns of secondhand smoke exposure.

Jim Knox, the California managing director for the American Cancer Society Cancer Action Network, called the new law a “big step backward” in the decadeslong fight to shift away from indoor smoking, according to the Los Angeles Times.

The bill, which will take effect in January, gives local governments guidance on imposing standards when approving business permits. This includes standards for ventilation to limit smoke exposure.

Twenty-four states and Washington, D.C., have legalized cannabis, while Florida, North Dakota and South Dakota have initiatives on their ballots in the November election.