The Rise of Cannabis Consumption Lounges

Cannabis Hospitality: The Next Big Business Model

One of the rising trends in cannabis marketplaces are consumption lounges. Most recently across the New York cannabis program, we have seen “consumption facilities” which will allow for consuming cannabis and cannabis products in designated areas, be they attached to or on the same property of a retail dispensary or not.

More and more states have been turning their attention to offering consumption lounge licenses. Here we’ll offer details on what state cannabis market you can find a consumption lounge in, what you may need to know if you want to enter this new line of business in cannabis, and why consumption lounges are so important to the entire cannabis industry.


Where Can I Find a Cannabis Consumption Lounge?

While nearly half of all states allow adult-use cannabis and nearly 40 have their own medical market, only a handful have consumption lounges. Cannabis Creative Group have identified just ten states that allow (or will soon allow) consumption lounges. These are: 

Where Can I Get a Cannabis Consumption Business License?

However, this list comes with caveats. New York has not begun issuing consumption facility licenses just yet, but we anticipate the application window for these to start next year. New Jersey allows for consumption lounges but so far only Jersey City and Hoboken have passed legislation allowing for these lounges. And Massachusetts has created a social equity focused pilot program for consumption lounges, but has yet to fully implement it. So even this short list is secretly a bit shorter when you get into the weeds of it.


How Can I Open a Cannabis Consumption Lounge?

1) Confirm That Your State And Municipality Allows This Business

First, make sure the state that you want to operate in allow for consumption lounges (see above!). We are excited that more states on the horizon once their adult-use cannabis program has been fully implemented will allow for consumption lounges too. But beyond the states that allow this, remember to check the municipality you’d like to operate in too and see if they will allow for consumption lounges. 


2) Know What’s Required For License Applications and When

Be sure through this process that you check about any applicable license application windows and any narrative plans or supplemental documents which may be necessary to apply for a license


3) Business Planning & Financial Modeling for Your Consumption Lounge

Once you know things from a regulatory perspective, you’ll want to make sure that the business is viable for you. This is where financial modeling and cannabis business planning can be essential. In our experience, the profits associated with just a consumption lounge can be difficult (not impossible!), but this is why financial modeling is crucial for consumption lounges if you aren’t also pursuing another cannabis business type such as a retail dispensary.

During this phase, you’ll want to see what you can offer for in-person experiences. More and more, individuals are seeking consumer experiences in their cannabis consumption and to get people into the door of your establishment, you’ll want to tailor your lounge to a unique and memorable feel that will also keep people wanting to come back.


Why Are Cannabis Consumption Lounges Important?

Yes, consumption lounges are fun (or at least they should be!) but they also serve a vital purpose in the cannabis space. Often, individuals are faced with difficult home lives and may need cannabis to address mental or physical health needs. But many people may not be able to consume cannabis or cannabis products at their home or place of residence for various circumstances. This is where lounges can come in and assist with individuals in creating a safe and legally compliant location for consumption.

Depending on the design, along with any additional amenities offered, these lounges can also be a place for other social or work gatherings, essential for peaceful places to network, be productive and focused, or unwind after stressful days. Not only do consumption lounges offer another good, legal spot to enjoy cannabis, they can often serve as an oasis for many.


Get Started on Your Business Application with Help from Our Experts

If you are interested in pursuing a consumption lounge license or would like to engage in early financial modeling, business planning, or brand development for your lounge, Canna Advisors is eager to help and make your cannabis entrepreneurial dreams come true. 

Ready to apply in your state? Contact our consultants to see how we can help!

Stuck in the exploratory phase with more questions than answers? Book an hourly consultation for a personalized call with our cannabis experts to set you on the right path to opening your own business.

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