How Consumption Lounges Could Open a New Landscape for Cannabis

Cannabis is a social experience for many consumers but until recently, legal social consumption in most states still had to be done in private. With new legislation being drafted around consumption lounges in Nevada, we’re now seeing the social applications of cannabis consumption hit the spotlight.

This past June, Nevada officials approved regulations that set the groundwork for social establishments to accommodate cannabis consumption. This could be the start of a mainstream movement that merges cannabis, social experiences, and hospitality in a new way.

Here’s how:

The Nevada Policy Difference

Consumption lounges are a relatively new business to most parts of the country, but some states like Alaska and California have had lounges that are already in operation. They’re just not that common and, sometimes, not legal. Usually, these are retail locations with a designated smoking area inside an existing dispensary.

Nevada’s rules, on the other hand, mirror common bar establishments. This model allows a lot more flexibility for cannabis businesses. With around a total of 60 licenses to start, potential licensees have expressed a variety of goals for consumption lounges, ranging from converting an existing restaurant into a place where diners can try infused meals to a lounge that acts as a magnet for foot traffic to nearby businesses, according to MJBizDaily.

Just by putting cannabis consumption into accessible, social spaces, more consumers are likely to come across these businesses. “Happy hour” could look very different in a few years. The one major drawback currently is that consumption lounges must be 1,500 feet away from any casino or other business recognized as a gaming establishment - which, in Las Vegas, will push most lounges off-strip.

Still, many cannabis businesses are optimistic. Especially existing dispensaries, which already have the right location and right operational expertise to open a lounge.

“You take your shoes off. You dance in the water. You consume cannabis, and there’s 100,000 rooms looking down on you from the Vegas towers,” Planet 13 co-CEO Larry Scheffler told Politico about the dispensary’s upcoming consumption lounge experience. “[There] will be like nothing like it in the world when we finish it.”

What It Looks Like

Many states have eliminated the possibility of even smoking indoors. However, exemptions exist for specific businesses like cigar bars, private clubs, and casinos.

Consumption lounges do not necessarily equate to smoking-only spaces, either. The Nevada legislation allows for the inclusion of cannabis could be in the form of a bubbly drink, infused food, or a concentrate that can be added to a beverage.

The framework set by Nevada for businesses also offers the opportunity to incorporate cannabis into settings such as yoga, infused food tastings, and THC-based therapies. With these in-person experiences available, we could see health and wellness consumption lounges that connect with new cannabis consumers. Most importantly, consumers will have places to join a community, meet up, and consume cannabis.

The big difference with lounges is the capability to both buy and consume in the same location. In Denver, where recreational cannabis has been legal for almost ten years, consumption lounges have existed in some form for the past few few years, but were unable to legally offer cannabis for sale. Earlier this year, the first lounge experience finally opened. The lounge, or “cannabar,” is Jad’s Mile High Smoke, and offers a full calendar of events like karaoke, open mic nights, live music, and stand-up comedy.

This is a great preview of the potential for cannabis consumption lounges in the future. By offering a destination for consumers to do more than just purchase cannabis, businesses will have new ways to get customers through the door and build loyalty.

If the experience in a lounge is good enough, it can become a differentiator for any cannabis business and give way to interesting new partnerships and co-marketing initiatives. Now, it’s up to states to think about how licensing would work. Nevada may be where we see the first critical density of consumption lounges, but many other states may not be far behind.