By: Rachel Gillette , Partner and Chair of the Cannabis Law Group
Photo courtesy abc7.com
The nation’s first cannabis café opens in LA
On Tuesday, the first cannabis café in the United States opened in West Hollywood. Lowell Café markets as “America’s first cannabis cafe serving farm fresh food, coffee, juice, and cannabis daily. Sit on our patio, order a meal, have a conversation and experience cannabis together.” The café will offer a range of flowers, vapes, edibles, concentrates and extracts. You can even bring in your own cannabis for a $20 per person “tokeage fee,” similar to a corkage fee at a restaurant. Due to the current state laws regarding cannabis and the FDA’s position on hemp-infused food products, no infused dishes will be served.
Alaska was the first state to legalize social consumption at the state level last March. It allows businesses that sell marijuana to also provide a space for people to consume it. Dispensaries, though, are required to create a use area that is separate from the retail shop in a freestanding building. Earlier this year, Colorado passed a law that would allow hospitality establishments, however local jurisdictions will have the chance to opt out of offering these types of licenses and they could also limit what types of cannabis use they permit (for instance, smoking flower). The law will go into effect in 2020. Massachusetts also recently approved cannabis cafes in the state, with a $1,500 application fee and a $10,000 annual renewal fee. The licenses will be reserved for social equity and empowerment applicants for the first two years.
If you’re considering applying for a license for a cannabis café or consumption lounge in any state where it’s legal, here are a few things to consider:
How does your establishment make money? Depending on state and local laws, your business may or may not be able to profit from sales of cannabis.Where should your establishment be located? Most likely, local jurisdictions will have the greatest say in location, but expect to be a certain distance away from schools, daycares, playgrounds, parks, churches, etc.Will smoking flower be allowed? This will depend on the Clean Indoor Air Act in your state and may be further influenced by local laws.What about liability? There will be regulations, both state and local, which may require businesses to have policies in place to prevent over-consumption and a system to monitor or be responsible for patrons.
If you are considering a cannabis café or consumption lounge, it’s critical to involve legal counsel early in the process to avoid costly mistakes down the line. If you would like to discuss participation in this trend, please reach out to a Greenspoon Marder attorney.
About Greenspoon Marder Greenspoon Marder is a national full-service business law firm with 240 attorneys and 26 locations across the United States. We are ranked amongst American Lawyer ’s Am Law 200, as one of the top law firms in the U.S. since 2015. Since our inception in 1981, our firm has been committed to providing excellent client service through our cross-disciplinary, client-team approach. Our mission is to understand the challenges that our clients face, build collaborative relationships, and craft creative solutions designed and executed with long-term strategic goals in mind. We serve Fortune 500, middle-market public and private companies, start-ups, emerging businesses, individuals and entrepreneurs nationwide.
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