Starting next year, diners in the western US state of California can smoke cannabis at certain restaurants, thanks to a new law allowing for "cannabis cafes" akin to those popularized in the Netherlands.

Democratic Governor Gavin Newsom signed a bill into law Monday authorizing businesses that are already licensed to sell cannabis to serve hot food and non-alcoholic beverages.

It will go into effect on January 1, 2025.

California legalized recreational cannabis in 2016, but dispensaries that sell the substance legally remain less popular than the black market.

"Right now, our small cannabis businesses are struggling to compete against illegal drug sellers that don't follow the law or pay taxes," said state assemblyman Matt Haney, who authored the bill.

"In order to ensure the legal cannabis market can survive and thrive in California, we have to allow them to adapt, innovate and offer products and experiences that customers want," Haney continued.

Some cities like West Hollywood, near Los Angeles, have been calling for such legislation for years.

The liberal enclave hopes to compete with Amsterdam and already hosts "cannabis lounges," where dispensaries are attached to separate bars or restaurants.

Now, the law will allow any business in the state to follow the same model without falling into a legal gray area.

Not everyone is in favor of the move, however.

Public health advocates have expressed concern about the effect smoking cannabis in restaurants can have on lung health.

"Secondhand marijuana smoke has many of the same carcinogens and toxic chemicals as secondhand tobacco smoke," read a statement from the American Cancer Society's advocacy branch.

The new law "undermines the state's smoke-free restaurants law and compromises its enforcement, thus threatening to roll back decades of hard-won protections of everyone's right to breathe clean, smoke-free air."

California notably banned smoking in bars and restaurants nearly 30 years ago, the first US state to do so.

Newsom had vetoed a different version of the bill last year, citing the health concerns.

However, the new version of the law signed Monday will include parameters to ensure employees in cannabis cafes can wear masks to protect themselves and be informed of the risks of inhaling secondhand cannabis smoke.