Walking into JAD’s Mile High Smoke, just outside Denver, is like walking into just about any other bar. It has video games, board games, six giant televisions showing the NFL on Sundays or UFC pay-per-view matches on weekends when there’s not a band or comedy show.
And that’s on purpose.
“We are a bar in every sense of the word, except we do not sell you alcohol, we sell you cannabis,” says Stacey Davis, who owns JAD’s with her husband, Josh.
The building in which JAD’s is located had been a bar for six years prior to its new occupants opening their doors. The tap lines are still in place, though beers have been replaced by sodas that will hopefully soon be THC offerings. JAD’s is Colorado’s first cannabis hospitality licensee, one of the businesses at the cutting edge of a new business model expanding across the legal states, including California, Nevada and New York.
“Hospitality has been one of the most needed aspects to the cannabis industry in Colorado, because you could buy cannabis on every corner out here, but there’s never been a place to consume and enjoy the social aspects of cannabis,” says Dewayne Benjamin, owner of the Tetra Hospitality Group, the first business to receive a hospitality license inside Denver city limits.
Tetra has been open as a private club with a membership model, but the new license will allow it to open to the public, though unlike JAD’s, it will function on what Benjamin calls the “bring your own bud model,” focusing instead on atmosphere and amenities, like video games and snacks, or events.
It’s a brave new world for the cannabis industry, one that even regulators are embracing to plug what many see as a hole leftover from the initial legalization legislation passed in legacy states.
“We knew we needed a safe place for people to be able to consume if they were coming from out of state, but also for our local residents to have somewhere to safe to consume outside of their home,” says Molly Duplechian, executive director of the Department of Excise and Licensing for the city of Denver. “We’re hopeful and supportive of this business model.”
At JAD’s, like in any alcohol-serving bar, patrons place their order with a budtender or a server. JAD’s buys cannabis products wholesale from the state’s roster of producer/processors. It offers pre-rolls, flower, concentrates and edibles, though Davis says the company sells fewer edibles than she initially expected.
And like any bar, no outside cannabis — or paraphernalia — is allowed on premises. Everything is provided, including papers, a silicone pipe or even a dab rig (your choice, electronic or butane).
“When you go to an alcohol bar, you’re buying your beer, you don’t pay extra for the glass that comes in,” Davis says, though patrons have the option to upgrade to larger bongs, pipes or rigs, including a gravity bong.
Davis says there’s a large number of people that use her business for work meetings in the same way they use traditional bars, particularly members of the state’s cannabis industry.
“We have a lot of people that utilize this space during the day for work for sales meetings, people will come in and grab a pre-roll and a Coke and sit and do a sales meeting for two hours, or they’ll bring in people they want to talk to about products,” she says. “A lot of the ancillary businesses use this space as kind of a home base.”
A similar thing happens at Tetra, though it does not sell cannabis currently and will not under its new license, which does not allow for it.
“A lot of people will just come in to do light work, log on to the internet and work away on their laptops,” says Benjamin.
Tetra has been open as a private consumption lounge for five years, using a membership model that allows people to join for a year, month or even a day. Benjamin decided to get a non-sales hospitality license in order to maintain the atmosphere and because he wanted to maintain the relationships he has built with dispensaries and brands, as well as be a potential marketing platform for the industry in the future.
And though it is built with locals in mind, Tetra has become a hot spot for tourists coming to Denver from around the world.
“We’ve seen people from 48 states and 38 different countries in our membership database,” he says.
While a lack of places for tourists to consume cannabis is a problem in Denver and other cities that have seen an increase in canna-curious visitors, it reaches another level in Las Vegas, where more than 35 million tourists visit each year and its world-famous casinos take an antagonistic approach to cannabis.
But the state and city also recently allowed for the licensing of consumption lounges and several major players in the city’s cannabis community are planning for openings in the next year, all with the flair that Las Vegas is known for.
At Planet 13, for example, the company’s Las Vegas flagship store is designed to compete as a destination experience for tourists, billing itself as the largest dispensary in the world and seeing tens of thousands of visitors each year, some making a stop at the dispensary before even dropping their luggage at their hotel, according to David Farris, vice president of sales and marketing for the company.
“We are selling to tourists who don’t have that place to safely consume, and we get frequent questions from our customers,” he says.
Farris says Planet 13 officially received its consumption license in November 2022 and is currently working to build out the new lounge and consumption space inside the company’s giant building just off the Vegas strip. An opening is planned for mid-2023.
“Our biggest priority is making sure that it’s done the right way,” Farris says.
Christopher LaPorte, a Vegas nightlife veteran and founder of Reset Las Vegas, is working with local dispensary Thrive to create its version of a social use lounge, with the emphasis on “social.” LaPorte sees a high-end establishment in the vein of classic, Rat Pack-era Las Vegas lounges or the high-end nightclubs that came to dominate the scene in the early 2010s, complete with top-quality food and other amenities one expects at the best clubs on the Strip.
“What was the lounge? A place that people sat down, enjoyed the vibes, the aesthetic, the people that are there,” he says. “And then you have things to keep those people there, whether it’s food and beverage, and now, cannabis.”
LaPorte says he also sees the lounges as a “petri dish” for the industry to see new trends in exactly what people are consuming and how, and could be a place where products like infused beverages really begin to take off in the public consciousness.
“We did sports betting in Nevada for a very long time, now everyone else is doing it,” says LaPorte. “If we do this cannabis hospitality thing properly, everyone else can follow suit with how we do that.”
But doing hospitality properly means meeting the host of regulations that come along with opening a public smoking lounge, like a boosted HVAC system, all of which can be expensive and time consuming.
“Here’s what you need to know: triple your budget, quadruple your timeline,” says Davis, who opened JAD’s in April 2022 after years of planning and waiting for a license. “If you thought it was going to take you three months to open, it’s going to take you a year.”
Benjamin says one of the factors slowing his plan is the new business codes he has to meet, including the updated ventilation system.
“My model was pretty much the outline for the consumption lounges in Colorado,” he says. “So it wasn’t a big change on the business side, but getting building permits, new ventilation systems, things like that are pretty much the biggest change to my business that I’ve experienced.”
JAD’s, for example, has an HVAC system on the roof designed to replace all the air in the building at a higher rate than code requires, as well as additional smoke eaters to prevent clouds of smoke accumulating as people walk in.
Davis says Adams County, where her business is located, has been great to work with, but everyone is still figuring out what social consumption looks like, including the regulators.
Truman Bradley, executive director of the Marijuana Industry Group, a Colorado cannabis trade association, says the world of social smoking can be anything, not just a single business model.
“People may be picturing some sort of hookah lounge or a smoky bar, but that’s not exactly right,” he says. “We’re also talking about get-high-and-paint date night opportunities, or a cannabis-and-yoga opportunity.”
Beyond the HVAC requirements, Bradley says additional requirements that don’t exist for traditional, alcohol-serving establishments, like distance restrictions between businesses, make it difficult to find locations, leading to a “slow start” for this aspect of the industry, on top of the additional costs.
“But it’s really something I think the city will benefit from. And it really is sort of a next evolution in the cannabis movement,” he says.
Davis and Benjamin say their businesses don’t bring the traditional problems that come along with similar venues that serve alcohol, helping prove to the city and state that cannabis consumption lounges are safe for all and will one day simply become part of the landscape.
“No one gets assaulted in my parking lot, no one gets in a fight in the middle of the bar. That doesn’t happen here. There’s no anger. None of that happens here, that all only happens with alcohol,” says Davis. “Other than that, you walk in and the first thing people say is, ‘Oh, it’s a bar.’”