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.
An ordinance signed last week by Mayor Daniel Lurie changed all that. Dolan is now on track to open one of San Francisco’s first cannabis cafés — possibly the first. The legislation allows cannabis shops to serve food, nonalcoholic beverages and have live entertainment.
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 cafés 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 cafés to open.
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 legislation. But he also had advocated in the past for legalizing cannabis cafés with Assemblymember Matt Haney (D-San Francisco), who authored the state legislation, and Mandelman.
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.
If it hadn’t passed, though, he said, he would’ve been at real risk of losing the project — the cafe aspect, he said, is what makes his project stand out.
That assessment is echoed by Cann Intel, which wrote that between 2020 and 2025, the profit margins reported by San Francisco dispensaries had, on average, fallen from 20% to 10%. “Consumption lounges can command premium pricing,” the article continued. “Early projections suggest $45-75 per person average spend versus $65-85 for traditional retail transactions.”
In a press release Mandelman, who also successfully sponsored legislation to suspend the city’s cannabis tax until 2036, described the cafés as a boon to the city’s tourism economy. “Cannabis cafés are part of this city’s recovery, right alongside our entertainment zones, neighborhood activation, and free concerts, and today’s vote makes sure our legal retailers aren’t left behind. Amsterdam draws real tourism dollars from its cannabis cafés, and while San Francisco isn’t Amsterdam, there’s no reason our operators shouldn’t have the same tools to compete and help bring people back into our neighborhoods.”
The race is on
It takes 31 days after the mayor’s 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.
The trade journal Cann Intel estimates that, now that the ordinance has passed, 12-18 cannabis cafés will open in San Francisco by mid-2027, concentrated in the Mission, SoMa, and Haight-Ashbury.
The city’s Office of Cannabis has issued 79 cannabis retail permits citywide, of which 66 were active as of earlier this year. Currently, seven of those active permits are in the Mission — Dolan’s, which is processing, would bring that number up to eight.
Most of the existing cannabis shops are within five to eight blocks of Dolan’s future cafe and the intersection of 16th and Mission, which has a large concentration of smoke shops 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 of smoke shops are likely to also attract cannabis dispensaries, and that those areas tend to be more low-income. The Castro currently has three cannabis retailers and Sophie Marie, a legislative aide to the board president, said Mandelman would be open to cannabis cafés coming to his district.
A long journey
A cannabis café 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.
Getting there has been a long journey. In 2018, Dolan applied for a cannabis business permit with San Francisco’s Office of Cannabis. Dolan settled on 560 Valencia St as a location — which 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’s then tenant, furniture retailer Blu Dot, ended in 2021.
In February 2020, the first phase of their application was approved, and in June of 2020, Dolan began to hold community outreach meetings about opening a “cannabis equity marketplace” at 560 Valencia St.
50 percent of licenses were set aside for “equity applicants” — or those who partnered with them. Dolan said he already met the conditions to qualify as an equity applicant himself.
Some neighbors supported Dolan’s 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 promising to prioritize the hiring of local employees, people with disabilities, and those arrested for non-violent marijuana-related charges.
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.
In January of 2021, the project was unanimously approved by the Planning Commission. That November 2021, Blu Dot moved out of the space.
But Dolan couldn’t pull together the financing to move forward. After several unsuccessful attempts to lease the space to someone else, said Dolan, and the owners decided to sell the building.
The new owner, so far, is supportive, Dolan said.
Ron Elder, the president of the Valencia Corridor Merchants Association, said that while he has concerns over indoor smoking, the optics of armed security and the possibility of a marijuana café becoming a target for robberies, he hopes that the café will bring diversity in business and is glad that it will occupy an empty storefront.
“I would love for him to maybe reach out,” said Elder. “or he can come talk to us.”
Dolan said he planned to make good on all the commitments he made back in 2021, however, adding a kitchen, he said, will reduce the available retail space by a quarter.
What will absolutely remain, said Dolan, was the promise to hire employees with disabilities, or with previous marijuana convictions. Dolan started using cannabis for medical purposes decades ago to help with his hearing (he’s 40 percent deaf) and migraines, he said, and has multiple cannabis-related arrests.
“We have a deep respect for folks that are coming from this level of adversity,” he added. “We find them to be high quality employees. We want these types of folks coming to us to work with us.”
Dolan still doesn’t have a name for the café, he said, but is currently planning the menu. “I would describe it more like a limited service restaurant slash café with light bites, shareables fun food,” said Dolan. “I call it ‘cannabis adjacent cuisine,’ — stuff that people that are consuming cannabis will enjoy. Stuff that’s salty, sweet, spicy.”
“I’m super excited to get this project off the ground. It’s a gigantic milestone, not just for me, but I think for our cannabis community here in San Francisco.”
So more zombies in the neighborhood. Sounds delightful. Maybe a red light district too.
Seriously, I’m all for folks to have a light puff now & then but would much rather see a non drug use in an area of already heavy drug use.
Perhaps if Lurie & Fielder would just clean up 16/Mission it wouldn’t be so bad.