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On-Premise Cannabis Under Consideration In Key Markets

March 5, 2019

While cannabis retail sales are steadily expanding in legal consumption states, the on-premise segment remains in its nascent stages. But some see “cannabis lounges” as a key opportunity for the industry moving forward. Numerous states are considering including them in future legalization efforts and several states that have already legalized private use are looking at expanding protections to on-premise spaces.

In Colorado, for instance, the Denver City Council voted recently to leave in place what had been a temporary pilot program for consumption lounges. Voters in the city approved I-300 in 2016 to allow special events and venues like restaurants, yoga studios, and art studios to allow cannabis use in specific areas, with the initiative scheduled to end in 2020. The measure still bans indoor smoking, concurrent alcohol consumption, or any cannabis sales at the same establishment. However, legislation is expected later this year that would ease many of these restrictions and potentially remove the prohibition on cannabis use at liquor licensed establishments completely.

A similar debate is ongoing in Oregon, where the state legislature recently began deliberations over a bill that would allow for delivery services, event permits for temporary cannabis sales and consumption, and provide exemptions to the Indoor Clean Air Act, a major roadblock for businesses that want to allow smoking on-premise. Other proposals would allow social consumption generally but continue to restrict smoking to outdoor spaces like patios. Meanwhile, in Massachusetts, the state’s Cannabis Advisory Board voted unanimously to recommend that state regulators should allow social use there as well.—Danny Sullivan

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