The coronavirus pandemic is inflicting setbacks in marijuana consumption lounges, however some house owners are sticking to their plans

Many marijuana companies have just started opening lounges and tasting rooms where their customers could enjoy the products they bought a year ago during the coronavirus pandemic and have had to put those plans on hold.

Legal and regulatory issues have also created hurdles in some states.

The future of such venues is therefore in the air, raising questions about a business model that entrepreneurs are looking to use to generate additional revenue.

Christopher Stefan, head of Denver-based financial services platform Cannabis Capital Advisors, wonders if people are ready to return to consumption lounges and tasting rooms after the pandemic ends, and whether marijuana companies that had planned to open such venues on their premises will still do it.

“Are you taking a financial risk to expand and occupy this if you are not sure how people will behave?” he asked.

However, some business owners plan to give it a try and open up local consumption points.

Change of plan

Marijuana companies in Alaska, Colorado, and Nevada had prepared for the day when their states would allow them to run lounges and tasting rooms while others were already up and running.

However, with airborne coronavirus spreading rapidly, people blowing smoke into an enclosed space seemed to accelerate the rate of infection.

In Alaska, regulators approved two cannabis lounges last year. But then came COVID-19.

One of the Ketchikan venues opened briefly in October. However, a sharp spike in COVID-19 cases forced the owner to take a break, the Associated Press reported.

A second lounge in Fairbanks is slated to open this year.

Colorado also allows consumption lounges, but few are open.

The Smokin ‘Gun pharmacy in Glendale, a suburb of Denver, had applied to operate their 100-square-meter tasting room shortly before the pandemic.

When Governor Jared Polis issued a statewide stay at home order on March 26, 2020, the retailer withdrew its application.

Lindsey Mintz, owner and managing partner of Smokin ‘Gun, said she wasn’t sure when the speakeasy-themed tasting room might open.

And instead of taking up the 100 square meters originally intended for the tasting room, she is considering building a roof terrace for the lounge.

The Smokin ‘Gun hadn’t determined whether it would charge a fee and allow people to bring their own marijuana products into the lounge, or whether it would sell cannabis in the lounge for people to consume locally.

“We were still doing an internal analysis of the business structure when everything closed,” said Mintz.

Mintz also owns Shotgun Willie’s, an adult nightclub next to Smokin ‘Gun. She said many of the cannabis shop’s late night customers are coming from the nightclub.

“For us, it’s about getting all of our ducks back in line and seeing where the industry goes in the first half of this year,” she said.

Regulatory obstacles

Although Colorado has laws on the books that allow consumption lounges, restrictions have prohibited some companies from opening them.

When Lisa Leder bought a historic Denver home in 2019, she had planned to apply for a social consumption license.

However, it turned out that the building was less than 10 feet from the 1,000 feet distance that law should be from a daycare center.

“Tourists really don’t have a place where they can legally consume,” said Leder. “Colorado has progressively said we are open to selling, but we really don’t want you to consume it here. In most hotels you are not allowed to consume. “

Instead, Leder turned the house into a venue and museum called the Marijuana Mansion.

While consumption is not permitted when visiting the marijuana villa, anyone who rents the entire room for an event is allowed to take part in cannabis consumption on site. The cost of booking the venue for an evening starts at $ 800.

“The point of the space is to be open to industry events,” said Leder. “You can rent the room and bring pizza with you, or we can take care of it.

“We want a social consumption license and we’ve tried to reduce the setback by 500 feet, but the city is determined to keep it at 1,000 feet.”

California also allows consumption lounges, but these are closed due to the pandemic.

“There is no place where people are smoking and blowing on each other right now,” said Stefan of Cannabis Capital Advisors.

Full speed ahead

However, this hasn’t stopped some business owners from moving forward with their plans.

In the small town of Sesser, about 500 km from Chicago, the owner of the Luna Lounge is hoping to open the local cannabis use venue in the next few months, according to The Southern Illinois.

It would be the state’s first recreational cannabis use lounge.

Customers would bring their own cannabis. Luna sold or rented roll papers, pipes, and other paraphernalia for customers to enjoy their cannabis.

In Nevada, before the pandemic, a tasting room opened on tribal land north of the Las Vegas Strip, which is now temporarily closed due to COVID-19.

NuWu Cannabis Marketplace was allowed to open a tasting room as sovereignty exempts the southern Paiute tribe from the state’s current ban on such venues.

Meanwhile, Las Vegas retailers like Planet 13 are planning consumption lounges if the state permits them.

Planet 13 built its 112,000-square-foot supermarket with the intention of opening a consumer lounge if the state permits such facilities to operate.

When that will happen is unclear. A bill through Nevada law would legalize lounges for the social use of cannabis.

“When we opened our superstore a few years ago, we really planned to expand into an entertainment complex,” said David Farris, vice president of sales and marketing for Planet 13.

“We have added a restaurant, a bar and customer-oriented production. We have also left significant real estate in our building for future retail and a future consumer lounge. “

Planet 13 plans to do something that is “very Las Vegas” but won’t start designing the space until a bill is passed allowing the use of venues for social purposes, and there are guidelines in place on how to do such lounges Farris said.

Under current Nevada laws, tourists can visit the state and legally purchase cannabis, but the only place they can consume it is in a private residence.

Concerns about social use lounges include people driving after using marijuana.

“Before COVID, 90% of our business was tourism,” Farris said. “All traffic comes from walking or Uber, and there are a lot of visitors from out of state. The problem that they are driving wouldn’t be a problem. “

States and on-site consumption

A number of states allow licensed marijuana places of consumption on-site. Regulations vary by state, and municipalities may need to enroll.

Source: Marijuana Policy Project

Status Consumption on site allowed?
Alaska Yes. Regulators approved on-site consumption regulations in late 2018.
Arizona No, not specified.
California Yes, if the location allows it. Tobacco and alcohol may not be sold or consumed on site. The area must be restricted to people aged 21 and over and must not be visible to the public or to people in areas that are not age-restricted.
Colorado Yes. The legislature and governor passed a law in 2019 that allows cannabis to be “hospitalized” locally.
Illinois Yes. On-site consumption is permitted at retailers for those locations that choose to do so.
Maine No. Social use was allowed in the voters’ initiative, but the legislature has rewritten the law.
Massachusetts Not from autumn 2018, although on-site consumption may be permitted in future regulations.
Michigan Yes. The law gives the Regulatory Department the power to issue additional types of licenses, including those for social consumption and consumption at special events. On-site consumption regulations have not yet been enacted.
Montana TBD – The department can allow on-site consumption.
Nevada Not yet. In 2019, the legislature and the governor passed a two-year moratorium on localities that allow on-site consumption.
New Jersey Yes. A licensed cannabis retailer can operate a cannabis consumption area. Customers can buy the cannabis from the retailer or bring it with them.
Oregon No.
South Dakota Not included in the constitutional amendment. Could be involved in the implementation of the legislation or approved by the regulators.
Vermont No.
Washington No.

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