Steps underway for NJ to get cannabis consumption spots
Regulatory framework awaits municipal OK and license applications
As the number of New Jersey dispensaries ballooned over the last year, consumers and medical marijuana patients have faced an ironic bind: There’s very few places, legally, to get high.
More than three years after New Jerseyans voted to legalize weed, regulators are ready to broach one of the last untapped pieces of the legal weed laws: Consumption lounges.
The New Jersey Cannabis Regulatory Commission approved rules this month for cannabis consumption areas, where legal weed customers and medical marijuana patients could visit, purchase and legally consume cannabis products. The rules are largely unchanged from those proposed last year, which were opened for public comment.
The commission’s action doesn’t grant permission to any entity to actually open a consumption lounge. Rather, it sets the state up to eventually issue licenses through an application process, similar to dispensaries, cultivation centers and manufacturers.
And just like other cannabis businesses, explicit municipal approval is required: Just because a town approved a dispensary doesn’t mean a consumption lounge is automatically approved.
“There are a couple more steps that need to happen, but this is a big milestone,” New Jersey Cannabis Regulatory Commission Executive Director Jeff Brown said.
Under the new rules, dispensary licensees can apply to the Cannabis Regulatory Commission for one single consumption area permit – at $5,000 per year, or $1,000 for a microbusiness – even if they have numerous satellite locations. While consumers can purchase cannabis there, they won’t be allowed to buy tobacco products or alcohol there (though bringing in food or ordering food delivery is specifically permitted).
Cannabis Regulatory Commissioner Charles Barker recommended an exclusivity period for social equity applicants and diversely owned businesses, similar to those enacted when the commission opened up applications for delivery and wholesale companies last year.
“It’s a critical component to establishing and maintaining equity and leveling the playing field,” Barker said.
There’s no cookie-cutter template for a consumption lounge, said Scott Rudder, interim president of the New Jersey CannaBusiness Association, which operates as a chamber of commerce for the state’s cannabis industry.
Some dispensary operators may want to use the space as an education center, a place to guide new cannabis users through their first experiences or allow customers to sample new products.
Others may use it like a bar or brewery, albeit with the kind of events that had been prohibited at breweries until recently.
“It really will be something that evolves over time,” Rudder said. “There are consumption lounges across the country, and none of them are the same. It’s still a relatively new, niche part of the industry.”
A consumption area could prohibit a customer from bringing their own cannabis, requiring them to purchase from the associated dispensary. But medical marijuana patients will be allowed to bring their own items, even if they were purchased at another dispensary.
And like a bar, consumption lounges would train staff to prevent overserving and provide resources, like taxis and ride-share services, for those who overconsume.
While states have been legalizing cannabis for over a decade, consumption lounges are a relatively new phenomenon. At the time New Jersey first began talking about legalizing weed, the first lounges had just begun opening in Colorado, the original state to legalize weed.
On paper, consumption lounges provide an answer to a thorny legal question: Where can you actually smoke legal weed in New Jersey?
Some landlords might allow tenants to use edibles or vaporizers, but it’s their prerogative.
So a renter could face a scenario where they’re allowed to purchase an ounce of legal weed but not legally allowed to consume it at home.
“It’s a huge, huge issue,” said Ed “Lefty” Grimes, a medical marijuana patient advocate and host of Sativa Cross, a podcast discussing cannabis issues in New Jersey and beyond. “If someone’s having a seizure, what are you supposed to do? Drag them out into the street? Patients are always put last, and we should be putting them first.”
It’s unlikely that consumption lounges will begin making a noticeable impact until late 2024 or even next year, Rudder said. Such businesses require separate municipal approval, and cannabis entrepreneurs have had a hard time getting the sign-off on dispensaries.
Only about one-third of municipalities in New Jersey allow dispensaries.
Cannabis users are allowed to consume products in their own home, but it prevents an even thornier issue for renters. Landlords can prohibit tenants from smoking marijuana, just as they can prohibit smoking tobacco. And cannabis use or possession is still prohibited in federally funded housing, as the drug is still illegal on the federal level.
Being a good neighbor goes a long way, Rudder said.
If operators play by the rules and regulations set forth by the state and municipality, consumption lounges could become a huge asset for the dispensary owners who open them.
“People will be concerned with overconsumption or people being loud or some kind of nuisance, and I think they’ll find that’s not the case,” Rudder said.
“The people opening these types of businesses want to be good neighbors.”