Elevating the Experience: The Potential of Cannabis Social Consumption
“Ultimately, social consumption of cannabis is an evolution, not a revolution. It’s something to be curious about, not afraid of.”
The wave of cannabis legalization sweeping the nation has brought with it a new frontier: social consumption. No longer confined to private residences, adults in an increasing number of states can now enjoy cannabis in designated public spaces, much like enjoying a beer at a bar or a cigar at a cigar lounge. But what exactly does this look like, and what are the implications for consumers, communities, and the cannabis industry itself?
The demand for social consumption spaces is undeniable. The rise in popularity of cannabis and hemp beverages across the country, particularly among those seeking alcohol alternatives and health-conscious options, speaks volumes about consumer interest. These individuals aren't necessarily looking to replace alcohol; they're seeking a different kind of social experience, one that aligns with their preferences and values. In Minnesota, for example, breweries are tapping into this trend by producing low-dose hemp-based beverages, offering a unique and social way to enjoy the benefits of cannabinoids.
Imagine stepping into a social consumption venue unlike any you've experienced before. A fine-dining restaurant where each course is meticulously paired with a micro-dosed cannabis strain or edible, designed to enhance the flavors and create a unique sensory experience. Much like a wine-pairing dinner or a beer-tasting menu, this model allows for a sophisticated exploration of cannabis and its culinary potential. These venues provide a safe and legal environment for those who may not be able to consume at home due to housing restrictions or family considerations. Furthermore, these venues offer a valuable alternative for those who may prefer to consume cannabis outside of their homes, whether due to personal preference, social considerations, or a desire for a more controlled and curated experience.
States are taking diverse approaches to regulating these emerging spaces, resulting in a patchwork of regulations and varying levels of market maturity. Massachusetts, for example, is proposing three different license types: "supplemental" licenses for existing cannabis licensees to add consumption areas, "hospitality" licenses for businesses like yoga studios or movie theaters to integrate cannabis into their offerings, and "event organizer" licenses for temporary events like festivals. These licenses will be exclusively available to Social Equity Businesses, Social Equity Program Participants, Certified Economic Empowerment Priority Applicants, Microbusinesses, and Craft Marijuana Cooperatives for an initial period of 5 years.
Meanwhile, in California, cities and counties have the authority to set their own policies for social consumption lounges. West Hollywood has embraced the concept, with venues like The Original Cannabis Cafe offering a menu of cannabis flower, edibles, and concentrates alongside food and non-alcoholic beverages. Colorado has also been a leader in social consumption, with lounges like Tetra Lounge in Denver providing a comfortable and social environment with a focus on community and education. Nevada has taken a more cautious approach, initially limiting the number of independent consumption lounge licenses to 20, with at least half reserved for social equity applicants. Illinois allows for BYOC (bring your own cannabis) consumption lounges, with the first such establishment, Luna Lounge, opening in Sesser in 2021. Alaska allows for on-site consumption at licensed retail cannabis locations, providing a model for integrating social consumption within existing businesses.
It's important to note that while cannabis can certainly be the main attraction in some social settings, it often plays a more complementary role, enhancing existing experiences rather than being the sole focus. Think of a music festival where cannabis elevates the enjoyment of live performances, or a yoga class where it deepens relaxation and mindfulness. This nuanced understanding is reflected in many states' approaches to licensing, allowing businesses to incorporate cannabis without fundamentally altering their core identity. A yoga studio, for example, wouldn't be obligated to become a cannabis-only establishment but could offer specialized cannabis-enhanced sessions or classes occasionally.
“Bars and restaurants are developing entire drink programs alongside their existing cocktail menus. The margins are far better on mocktails than they are on alcohol-infused offerings. Imagine a similar scenario in cannabis, where social consumption venues offer a range of non-infused options alongside their cannabis-infused products.”
Social consumption is an entirely different business model than a retail dynamic. Simply adding a smoking room to a retail store or dispensary does not make a social consumption venue. While there may be a market demand for such an option, it should not be the dominant model. Retailers may see it as a viable and profitable addition, but it is unlikely to be the lion's share of their business. Social consumption venues need to consider developing business models that simultaneously appeal to non-cannabis consumers. Think of the recent explosion in popularity of mocktails. Bars and restaurants are developing entire drink programs alongside their existing cocktail menus. The margins are far better on mocktails than they are on alcohol-infused offerings. Imagine a similar scenario in cannabis, where social consumption venues offer a range of non-infused options alongside their cannabis-infused products.
Beyond dedicated venues, there's also potential for cannabis "pop-ups" within existing businesses. Imagine a restaurant hosting a cannabis-infused dinner, a theater offering a cannabis-enhanced performance, or a music venue incorporating cannabis into a concert experience. These pop-ups can provide a taste of social consumption without requiring a significant investment from the host business. However, the success of such a model hinges on the existing business having sufficient cannabis interest or the pop-up having enough novelty to draw in customers. It's unlikely to attract or convert merely curious customers.
The Economic Boon of Social Consumption
Beyond the social and cultural implications, social consumption offers significant economic potential. While comprehensive research is still limited, early data suggests that social consumption can be a boon for local economies, generating jobs, tax revenue, and tourism dollars.
Job Creation: The cannabis industry as a whole is a significant job creator. The 2024 Vangst Jobs Report found that there are more than 440,000 full-time equivalent jobs supported by legal cannabis as of early 2024. That is a 5.4% year-over- year increase. Social consumption venues, with their need for trained staff, hospitality personnel, and ancillary services, are poised to contribute significantly to this job growth.
Tax Revenue: States with legal cannabis markets are already reaping the benefits of increased tax revenue. In 2023, states generated over $4.18 billion in cannabis-related tax revenue. Social consumption venues, with their potential for on-site sales and increased tourism, could significantly boost this revenue stream.
Tourism: Cannabis tourism is a growing trend, with destinations like Colorado and California attracting visitors from around the world. Social consumption venues, offering unique and immersive experiences, could be a major draw for cannabis tourists, further boosting local economies. The global cannabis tourism market is projected to reach $23.73 billion by 2030.
While these figures paint a promising picture, it's crucial to acknowledge the lack of comprehensive research specifically on the economic impact of social consumption. Further research and data collection are needed to quantify the full economic benefits and inform policy decisions. This data would be invaluable in convincing more jurisdictions to embrace social consumption and attracting investors.
Elevating the Experience: Technology's Role in Social Consumption
Technology is poised to revolutionize the social consumption experience, offering innovative solutions to enhance customer engagement, streamline operations, and promote responsible use. Imagine walking into a social consumption venue and being greeted by an interactive menu displaying detailed information on available strains, products, and their effects. These digital menus can be customized to individual preferences, dietary restrictions, and desired experiences. AI-powered recommendation engines can analyze customer data and suggest products based on past purchases, preferred flavors, and desired effects, creating a personalized and curated experience.
Automated ordering and payment systems, through self-service kiosks or tablets, can improve efficiency and reduce wait times. Customers can browse menus, place orders, and make payments seamlessly, freeing up staff to focus on providing personalized service and education. Smart sensors and automated systems can monitor and regulate temperature, humidity, and air quality within the venue, ensuring a comfortable and safe environment for consumption. These systems can also be used to optimize energy consumption and reduce environmental impact.
Some social consumption venues are exploring the use of virtual reality technology to create immersive and interactive experiences for consumers. Imagine exploring a virtual cannabis grow, learning about different strains and their effects, or even experiencing a simulated cannabis-infused culinary journey. While research is ongoing, technology is also being developed to assist with detecting cannabis impairment. Companies like Hound Labs and Gaize are developing breathalyzer-like devices and eye-tracking technology that may eventually be used to assess impairment and promote responsible consumption.
Artificial intelligence is already making its mark on the social consumption landscape, with applications ranging from personalized recommendations to automated budtenders. AI algorithms can analyze vast amounts of data on consumer preferences, product characteristics, and consumption patterns to provide tailored recommendations and enhance the overall experience. AI-powered chatbots can answer customer questions, provide product information, and even guide consumers through the consumption process. In the future, AI could play a crucial role in developing more sophisticated impairment detection tools, promoting responsible consumption, and ensuring public safety.
By embracing technology and AI, social consumption venues can create innovative and engaging experiences for consumers while addressing challenges related to safety, efficiency, and responsible use.
Navigating the Challenges of Social Consumption
Despite the excitement and potential, social consumption faces several challenges. Public safety remains a top priority, requiring strict regulations to prevent impaired driving and protect against secondhand smoke. Policymakers must also address potential health risks, particularly for vulnerable populations, and mitigate social concerns related to youth access and normalization of use.
Furthermore, the evolving nature of the cannabis industry demands an agile and receptive regulatory framework. Regulations must be adaptable to unforeseen challenges and responsive to the needs of both businesses and consumers. For example, in Massachusetts, delivery licensees initially faced financial difficulties due to a requirement for two agents in each delivery vehicle, a rule that was eventually changed after years of advocacy. This highlights the need for ongoing evaluation and adjustment as the social consumption landscape takes shape.
Adding to these challenges is the lack of reliable impairment detection tools for cannabis. Unlike with alcohol, where breathalyzers provide a relatively accurate measure of intoxication, determining cannabis impairment is more complex. This poses difficulties for enforcing regulations and ensuring public safety, particularly when it comes to preventing impaired driving. It's crucial to acknowledge that this gap in scientific advancement is not solely the responsibility of the cannabis industry. Despite years of legal cannabis use in some states, research on impairment detection has lagged behind, perhaps due to federal illegality or a reluctance to prioritize policy advancements in this area.
Beyond these broader concerns, operational and logistical issues demand attention. Finding suitable locations can be challenging due to zoning restrictions, community opposition, and the availability of appropriate real estate. Protecting employee health and safety requires comprehensive policies and procedures to address secondhand smoke exposure and ensure a safe working environment. Obtaining adequate insurance coverage can be difficult due to the unique risks involved in operating a social consumption business. Clear policies are needed for handling excess or unconsumed cannabis products to prevent diversion and ensure compliance with regulations. And finally, comprehensive risk management strategies are essential to address potential liabilities, ensure compliance with evolving regulations, and mitigate unforeseen challenges. Those strategies largely revolve around monitoring and detecting impairment and knowing what you don’t know.
Addressing potential negative impacts on surrounding communities requires a proactive approach. This includes educating the entire community, including neighbors, about the nature of social consumption venues and the regulations in place to mitigate concerns. Unfortunately, existing stigma persists despite many successful programs already implemented nationwide.
Public education is crucial to the success of social consumption. Fortunately, many states have adopted a mature and evidence-based approach to public education campaigns around cannabis, discarding the fear-mongering tone of dated campaigns. These campaigns focus on providing factual information about cannabis, responsible use, and the potential risks and benefits.
Social Equity: A Cornerstone of Cannabis Policy
“To silo the reparative work within one agency or industry fails to meet the magnitude of the harm inflicted on individuals, families, and communities. A comprehensive approach to restorative justice must expand beyond cannabis licensing agencies and encompass broader social, economic, and criminal justice reforms.”
Social equity is another critical consideration, and it's impossible to discuss cannabis licensing without a comprehensive plan to ensure equity at all levels of the industry – from ownership and investment to employment and ancillary businesses. Every operator must have measurable and equitable goals. Building a truly equitable cannabis industry requires a shared commitment from all stakeholders to dismantle systemic barriers, promote inclusivity, and ensure that the industry reflects the rich diversity of our communities. This includes addressing the harms caused by the War on Drugs, which disproportionately impacted communities of color. However, it's crucial to acknowledge that we cannot make up for the devastating consequences of the War on Drugs through cannabis licenses alone. To silo the reparative work within one agency or industry fails to meet the magnitude of the harm inflicted on individuals, families, and communities. A comprehensive approach to restorative justice must expand beyond cannabis licensing agencies and encompass broader social, economic, and criminal justice reforms. That said, the work of cannabis regulatory agencies can still be a model for other sectors, demonstrating a commitment to equity and using their platform to educate the public on the real harms inflicted by prohibition.
Finding investors for a market that hasn't been proven yet (social consumption) within an industry that already has limited access to capital raises concerns about actually getting these concepts to market. This is where state economic development agencies can play a crucial role, utilizing cannabis revenue to reinvest in this social and policy experiment. By providing grants, loans, and technical assistance to social consumption entrepreneurs, states can foster innovation, promote equity, and help create a thriving and responsible social consumption landscape.
“ Essentially, incubators would become proving ground for innovative consumption models that allow entrepreneurs to refine concepts, demonstrate viability, and hopefully, attract investment. Arguably, this would be far more impactful than a $50,000 grant.”
Taking that logic one step further, it would be really impactful if states, either through direct investment or through regulatory permission, created incubator spaces for entrepreneurs to prove their concepts. These incubators would grant licensees affordable, compliant space alongside valuable technical assistance, mentorship, and networking opportunities. Critically for the sake of social consumption, it would also create opportunities for businesses to test their concepts and gain feedback from consumers in a controlled environment. Essentially, incubators would become proving ground for innovative consumption models that allow entrepreneurs to refine concepts, demonstrate viability, and hopefully, attract investment. Arguably, this would be far more impactful than a $50,000 grant. Consumers, too, would have the opportunity to enjoy a diverse array of consumption experiences, fostering greater understanding and acceptance of this emerging industry.
Moving Forward: A Collaborative Approach to Social Consumption
Ultimately, social consumption of cannabis is an evolution, not a revolution. It's something to be curious about, not afraid of. Like much of the work done in cannabis legalization, it remains an experiment, and we must acknowledge that we may not get it right the first time. There are examples to learn from, but we must also be willing to be an example ourselves, forging a new path with creativity and courage. This requires a willingness to reflect, react, and adapt, ensuring that social consumption contributes to a responsible, inclusive, and equitable cannabis landscape. Let's embrace this new chapter with open minds and a commitment to learning and evolving, so that social consumption can truly reach its full potential.
Suggested Reading:
The following resources are provided for informational purposes and to encourage further exploration of the topics discussed in this article. Inclusion in this list does not constitute an endorsement of all viewpoints or information presented in these materials.
Grand View Research: Cannabis Tourism Market Size, Share, & Trends Analysis
Gender Policy Report (University of Minnesota): Are Cannabis Social Equity Programs Truly Equitable?
National Institute of Standards and Technology: NIST Researchers to Test New Approach for Detecting Cannabis in Breath
Prismm: AI’s Transformative Impact on Events: A Guide for Event Organizers and Venues
Marijuana Policy Project: Social Equity Policies in Adult-Use Legalization Laws
BlueprintRF: The Intersection Between IoT and Social Entertainment Venues
Blank Rome: Social Consumption Lounges in Massachusetts: Proposed Rules
Wilson Elser: Cannabis Consumption Lounges Present a Unique Risk Management Challenge
Benesch Law: Cannabis Consumption Lounges are Legal in Illinois and Elsewhere, But Where Are They?
Maryland Cannabis Administration: Report on On-Site Consumption Establishments
