What Are Cannabis Consumption Lounges And When Will We See Them in N.J.?

Amsterdam, inarguably the “weed capital” of Europe, is famous for its cafes that serve marijuana. In the U.S., however, the recreational cannabis markets in U.S. states that have legalized weed sales have yet to create a true comparison.

New Jersey’s adult-use weed market has been open for about seven months (since April), but for many consumers, their largest concern is finding a place to safely and legally consume the products they buy from the state’s licensed dispensaries. Strict consumption laws and residential ordinances limit where weed can be smoked.

Consumption lounges are designated and regulated spaces where people can bring and smoke products on site. These lounges would offer a clear option to legally smoke weed given New Jersey’s strict consumption laws and residential ordinances.

But there are many restrictions and requirements on what these spaces can look like and how they can operate

For starters, under the New Jersey Cannabis Regulatory Commission’s regulations, legal dispensaries permitted to open a consumption space must be at the same premises but separate from the retail sales space.

In its Dec. 2 meeting, the commission adopted more rules: the consumption areas must be enclosed whether indoors or outdoors; food and drink cannot be sold, but can be delivered or brought in by consumers; and there can be no consumption of alcohol or tobacco onsite.

On top of a licensing fee, retrofitting an indoor area with the equipment needed for proper ventilation to allow smoking can have astronomical costs.

If the consumption area is being built outside, the retailer will have to come to an understanding with neighbors, said Mollie Hartman Lustig, Partner and Chair of McLaughlin & Stern’s Cannabis Practice Group.

“It’s hard enough to find a single retail location in New Jersey, let alone appurtenant use that would permit consumption onsite,” said Hartman Lustig.

She explained that in many cities, consumption lounges are necessary to serve disenfranchised communities. In municipalities like Atlantic City, where a large number of people reside in federally-subsidized housing, the use of cannabis in homes can jeopardize those federally-subsidized grants.

Faye Coleman, co-founder and CEO of Pure Genesis, recently was approved by the state to construct a 4,000- square- foot cannabis retail space and consumption lounge in Atlantic City.

It wasn’t easy. The green light came after many months of forming partnerships with the Mayor’s Office and local planning offices, she said.

Coleman hopes to bring New Jersey’s first legal consumption area to fruition by next summer. The retail and consumer spaces will be known as Endo, located at 1015 Pacific Ave., near the Hard Rock Hotel & Casino and the Boardwalk.

In Coleman’s renderings, there is a retail sales floor on the first level. The second level consists of a large open floor plan for events, with glass-walled breakout rooms for smaller gatherings and transparency throughout the space

“The overall space will ease your mind, improve your health and enhance your life,” she said.

“The consumption lounge will serve as a multipurpose space for the community. Set in a fantastic space, the lounge will allow patients that live in public housing to consume without threat of breaking the law,” said Coleman. “It will be a space to educate the community on the benefits and uses of cannabis. Private events will serve as a source for fun and community.

Coleman said the location of Endo tells a story of public-private partnership and commitment to community-building. By purchasing a site that has been important to the area, Coleman helped Victory First Presbyterian Church complete a long-time goal of constructing a brand-new church building.

Endo worked with local authorities to strike a deal of 1% profit sharing to the city. She is hopeful this profit eventually helps to fund numerous community-action efforts that will support the disenfranchised residents of a city that most people are not aware is comprised of more than 85% people of color, often with low-incomes.

The local and state statutes already in place according to the current readopted rules under N.J.A.C. 17:30 (the document that lays rules for out “the regulation of the purchase, sale, cultivation, production, manufacturing, transportation, and delivery of cannabis or cannabis items”) create several complications to the construction and opening of these lounges.

The statute, according to Hartman Lustig, says cannabis items can either be obtained from the retailer or brought by a person to the consumption area.

“That’s really vague,” she said. “Is that someone coming in through the front doors of a cannabis retailer and out the backdoor to the consumption area with a product that may not be licensed in New Jersey? From a legal perspective, I would never advise a client to permit that.”

Hartman Lustig said from a liability standpoint, some very stringent security policies would be necessary, such as consumers being required to show that the products they are bringing to the consumption area are from a licensed retailer.

She references dram shop laws, which holds bars and restaurants liable for things like food poisoning and over-serving customers. The same would go for cannabis retailers who allow untested and unlicensed products into consumption facilities.

“If it’s a private establishment, they can allow whatever they want; but they would still be liable for what goes wrong,” Hartman Lustig said.

Hartman Lustig said another interesting part of the statute is the freedom to construct either an indoor, structurally enclosed area of the cannabis retailer that’s separate from the sales area, or an exterior structure on the same premises as the retailer, either separate from or connected to the retailer.

Rob Mejia, who teaches cannabis courses at Stockton University, said consumption lounge owners may face several other challenges once doors open.

“Some of the key issues that will have to be decided regarding consumption lounges is how to handle customers who bring in their own cannabis products, and how to monitor and handle customers who over consume,” he said, adding the public will be watching for any signs of increased impaired driving.

Mejia suggested we look to Europe for fleshing out other areas of concern, including how a lounge can actually make money with so many limitations in place.

“New Jersey should follow the Spanish model of consumption lounges where they offer a limited number of pre-packaged, single serving snacks, and bottled water and juices,” Mejia said. “This would eliminate any food deliveries and food and beverages could be purchased in advance in the dispensary and then picked up in the lounge.”

Click here for the rest of the story!