Cannabis Clubs: What You Should Know About This Growing Business

By Andrew Ward

Cannabis use lounges have been kept in check for years, although recently more and more laws governing lounges have been in place in the legal cannabis market.

The tide is already turning in several cities such as Ann Arbor, National City and Las Vegas. New York has added cannabis club licenses to its recently passed adult use law.

While uncertainty about regulations and expected revenues remains, many appear optimistic.

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What led to the upward trend?

Cannabis operators in the US say consumption lounges are the result of a maturing market and increased demand.

Tim Wright is CEO of Shasta management, which plans to open the largest consumer lounge in the USA in Imperial County, California, by the end of May. Above all, he praises the public.

“Just like in bars and restaurants, people want to be able to connect with friends while using cannabis,” Wright said.

David Farris, vice president of sales and marketing for Planet 13 Holdings Inc. (OTC: PLNHF) said the continued legalization of marijuana is leading to an advancement in the market. “Done right, consumer lounges can be beneficial not only to the public but also to the treasury at all levels, creating jobs and generating additional tax revenue,” Farris said. Farris praised Las Vegas for its commitment to the emerging sector and pointed out the city’s need for tourist consumption rooms.

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Harold Sims, Denver chef and winner of the Netflix Inc‘s (NASDAQ: NFLX) “Cooked With Cannabis” underscored the need for consumption lounges as legalization picks up pace. He found that 17 states have legalized adult cannabis use, although most continue to prohibit use in public or rented spaces.

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“In this gray area, cannabis lounges have found their market,” said Sims.

He pointed out that lounges could offer multiple benefits, such as providing a place to consume while at the same time mitigating resistance to public consumption and the smells associated with it.

“Eventually, it will boost the economy of the surrounding community,” added Sims.

Uncertain market performance is supported by expected opportunities

Mai Vue, COO of Shasta Management, said the company isn’t expecting profits straight away but is meanwhile focusing on creating an enhanced consumer experience for guests.

“It’s important that we provide our customers with a safe, comfortable and – in the desert – cool place to enjoy their products and try new ones,” said Mai Vue.

Many in the New York entertainment world see great opportunities in the Big Apple’s hospitality industry, if law allows it.

Photo by Adam Jaime via Unsplash

What about alcohol

Although cannabis consumption rooms are often compared to bars, one might wonder if lawmakers will ever allow the two to go together. Initial signs suggest that this will not be the case.

In 2019, California officials required Lowell Cafe and seven other licensees to divide their businesses into a restaurant and cannabis retail section to comply with regulations. According to California law, cannabis lounges are not allowed to sell food or drink.

Meanwhile, Chef Sims is optimistic. He says Las Vegas will be a big beneficiary when cannabis consumption rooms get going. He cited Sin City’s bars, nightlife and smoking ban (restricted to non-hospitality jobs) as selling points.

This article originally appeared on Benzinga and was republished with permission.