Updated Thoughts on Social Consumption Lounges: Summer 2023

I was pretty excited about social consumption lounges. These businesses, if located in one of the East Coast markets, are within our investment criteria. I’m sure it will come as no surprise that we have yet to make an investment. More recently, I'm starting to challenge the viability of the stand-alone social consumption lounge idea purely from a consumer experience perspective.

The premise behind separate, stand-alone cannabis social consumption lounges is flawed. It still may work, but it remains somewhat flawed. I think there are some scenarios that still make sense such as a social consumption lounges adjacent or within a cannabis retail environment. Listening to a recent episode of Coffee with the Collective podcast by The Cannabis Collective with Ariel Palitz, New York City´s first “Nightlife Mayor”, she reinforced and validated this thought process for me. During the show, Ariel was answering a question about the challenges of siloing cannabis in the night life scene. She said that it’s challenging because “cannabis is consumed everywhere”. She’s right. Cannabis is used in a wide array of social gathering places and separating that social use from other social gathering places such as bars, restaurants, night clubs and event spaces doesn’t make much sense.

State liquor licensing outfits think they have alcohol and cannabis siloed but they don’t. Finish your drink at the bar, walk outside, smoke a joint, walk right back into the bar and order another drink. Bring an edible with you to the bar and eat it right after your first drink and a few wings.

Cannabis use in social settings will have to become more nuanced for the type of environment the social use is taking place. For example, beer and wine are served and sold in many places where whiskey is not…and for good reason. Allowing different types of cannabis social consumption in different types of social environments needs to be considered and defined. Cannabis beverages at a bar or restaurant make a lot of sense. Allowing anyone to smoke a joint in a bar or restaurant would annoy almost everyone, including those smoking the joints.

The East Coast markets have yet another opportunity to lead by redefining social consumption for cannabis. Recently New York’s Office of Cannabis Management approved Cannabis Growers Showcases (CGS) as a stop gap to increase access to safer cannabis products. In a Linkedin post they rightly described this move as meeting consumers “where they are”. I am hoping this is a good sign as it relates to the development of regulations with regard to social consumption lounges as well.

If you or someone you know are building a company that addresses this opportunity please contact us.