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.
Kalkushka Lounge
Kalkaska, Michigan
Unlike most consumption lounges that are currently open, the Kalkushka Lounge in Kalkaska, Michigan, only sells access to legal consumption for a small entry fee.
“We do ticketed events,” says Kalkushka Lounge general manager Chris Atteberry. “A big thing that I do here is our comedy and our music. At our big events, I get sponsored by a cannabis company that’ll come in and just pass out products.”
While the lounge isn’t allowed to sell cannabis products, growers and brands can give it away to patrons. Atteberry says product giveaways have become somewhat of a regular occurrence at the lounge due to the large number of growers in the greater Kalkaska area. He says the sponsored events and giveaways are mutually beneficial as brands and growers can easily promote their products while adding value for patrons visiting the lounge on a random night or for one of its larger events. But free products are still an added value and patrons still bring their own supply or visit the lounge’s neighboring dispensary, which does deliver, to make sure they have something to consume.
Another factor that separates the Kalkushka Lounge from similar businesses in other states is its ability to sell food. Atteberry says the lounge doesn’t do much in terms of made-to-order menu items, but it offers drinks, snacks like chips and pizza by the slice. Plus, like lounges in other states, food can always be delivered. No alcohol is allowed, but Atteberry says he wouldn’t want to have to include it as it would only take away from the lounge’s unique atmosphere.
“I love the fact that alcohol and cannabis are separated, because I honestly think that once that mix starts to happen, you’re going to have a lot more overconsumption and you’re going to see the negative side,” he says. “To me, right now, everything is going well but if they incorporate liquor, obviously, attendance is going to increase. But I don’t know that that’s going to be a good thing necessarily for the business.”
Atteberry says there’s almost always an event of some sort, even if it’s as simple as tarot card readings or trivia. The standard entry fee to the lounge is $5.