A red-hot new segment of the industry is taking off, with little direction and massive obstacles
In theory, consumption lounges should be where the rubber meets the road in the cannabis industry. But while new lounges are opening across the country, operators don’t seem to have much runway to work with under the current regulations.
California in 2019 was the first state to allow licensed consumption lounges to open — and then the coronavirus pandemic hit and the segment was left idling. By the time the world was ready to stop working from home, Alaska was already running consumption lounges, Colorado, Illinois and Michigan were launching their programs, and Massachusetts, Nevada, New Mexico, New Jersey and New York were developing their own regulations.
Today, lounges are open in Alaska, California, Colorado, Illinois, Michigan and New Mexico.
But business owners in the fast-growing segment are hopeful the regulations, which were built around the regulatory framework of the existing state cannabis industries and don’t necessarily lend themselves well to hospitality businesses, will ease as the new segment finds its footing.
Marijuana Venture reached out to operators in open and upcoming states to see what these businesses can legally offer consumers, what is currently working for their business models and what they hope to incorporate in the future.
Good Titrations in Fairbanks, Alaska, is cannabis lounge, a dispensary, a grow operation, a restaurant and, weather and talent permitting, an entertainment venue. Customers entering the horseshoe-shaped building, which was formerly a Chili’s restaurant, can head left of the greeting desk for the cannabis retail store or right for the lounge, which includes a cultivation viewing room and a restaurant.
“It’s designed like a coffee shop and a cultivation viewing facility,” says owner Brandon Emmett. “On the left walls are windows to let you look into the flowering room from our hydroponics grow. We’re pretty proud of it because it’s cool for people to get to see the product being grown, being harvested and then be able to see it on the menu.”
While the lounge was designed like a coffee shop, the flatscreen televisions and bar at the center of the space definitely convey a sports bar feel — and the lounge is embracing it, hosting viewing parties for sporting events like March Madness.
“We have a lot of young, working-class people in the 21 to 27 range, that are our customers at night and on the weekends,” Emmett says. “We’re kind of like a sports bar. We’ve got like 12 flatscreen TVs, we play basketball, football, rugby, wrestling, a lot of non-traditional sports, surfing, that kind of stuff. There’s a big group of guys that come in to watch basketball because they don’t drink but they smoke.”
During the day, the lounge gets a lot of older veterans who come in to get a coffee, read the paper and smoke a joint, but his best customers are retired police and military veterans who come in for their usuals.
However, Emmett has had a hard time finding hospitality workers to staff the lounge, even though he’s friends with many bartenders and bar owners.
“The most charismatic bartenders in this city … I just can’t pay them enough to make up for the tips that they make selling alcohol and selling pull tabs,” Emmett says. “So we try to really incentivize people to stick around, but stoners just don’t tip as well as beer drinkers.”
While alcohol may be off the menu for quite a while, Emmett is looking to draw more customers in by hosting weekly events and booking entertainers as they travel through the city.
“We find that when we have events the café just kills,” Emmett says. “When we don’t have events, the café is just like any other coffee shop. You can only sell so much marijuana and people are only going to drink so much coffee, so you’ve got to get butts in seats.”