New Jersey Cannabis Agency Approves Consumption Lounges Rules

The New Jersey Cannabis Regulatory Commission (CRC), which manages the rules and regulations of cannabis in the state, met on Jan. 17 and unanimously approved regulations for consumption lounges.

According to a CRC press release, the rules would need to be approved by the New Jersey Office of Administrative Law, but after that occurs, dispensary operators would need to seek municipal approval in order to be endorsed by the CRC to have a consumption lounge (endorsements last for one year and must be renewed every year).

CRC executive director Jeff Brown said in a statement that consumption lounges would contribute to the success of New Jersey’s cannabis industry. “New Jersey’s cannabis industry is well on its way to being a billion-dollar industry, and consumption areas will likely bolster that—fostering a communal experience for those 21 and older around cannabis in a regulated and secure space,” Brown said.

The primary rules state that a consumption area can’t be a standalone business, but that it must be attached to a retail store. If a dispensary owns multiple dispensaries, they are only permitted to have one consumption space.

Consumption lounges would be required to have ventilation that is “robust enough to ensure proper ventilation and prevent smoke or vapors from affecting neighbors.” On-site sale of food, alcohol, tobacco, and nicotine products are not allowed, but customers can bring in their own food or non-alcoholic beverages. In addition to this, medical cannabis patients would be allowed to bring their own medical cannabis or cannabis items, “so long as the on-premises consumption of that cannabis is authorized.”

A consumption lounge would cost $5,000 for the initial fees, followed by an annual fee (with microbusiness only paying $1,000).

The CRC stated that potential consumption lounges would be allowed to make their own rules about operation hours, consumption area fees, medical cannabis patient priority access, or initiating paid events. However, they would also have to adhere to rules established by their local municipality as well, “including but not limited to restricting the number of consumption areas allowed in their town, business signage, and communication with municipal emergency services.”

CRC chairperson Dianna Houenou also provided a statement, expressing the importance of allowing a safe place for people to consume. Having space to consume cannabis is not just about recreation. It is also about providing equitable access and offering people a safe place to consume legal cannabis products,” said Houeno. “This move holds particular significance for communities that are limited in where they can enjoy cannabis—most notably, renters who cannot consume cannabis at home, unlike homeowners who enjoy greater freedom.”

Houenou added that “a couple more steps need to happen” before the CRC officially begins to accept lounge applications.

The New Jersey Monitor spoke with Alyza Brevard-Rodriguez, owner of a two-story building that will open soon in Jersey City. The first floor will be her dispensary, called The Other Side Dispensary, and the second floor will be reserved for smoke-and-yoga events or comedy nights, ideally if/when she is endorsed by the CRC. “I think it’s really critical for us to create those safe spaces to consume,” said Brevard-Rodriguez. “But the other part of it is connecting with people … I think it’s really important for the culture of cannabis.”

Legal cannabis sales took effect in New Jersey in April 2022. The CRC’s proposal for consumption lounge regulations was approved in December 2022, which was followed by a 60-day public comment period.

Scott Rudder, New Jersey Cannabusiness Association president, also said that the topic of consumption lounges was among some of the first conversations he had with New Jersey legislators. “That’s how the conversation started, and there’s been an evolution to where we are today,” Rudder said. “Patients will have a nice place to consume their medication, but now consumers in general will have the opportunity to go and unwind, talk to friends, maybe have lunch or watch musicians. We’re going to start small and see how things go.”

Rudder’s expectation is that a few consumption owners will open, but many more will choose to wait and see how things play out before investing. “I think you’re going to see some consumption lounges open here and there, and people will wait and see what they’re doing,” Rudder added. “Are they making any money? Are they free of safety issues or are other concerns being realized? People are going to look at this smartly.”

Rudder, who owns a dispensary that has not yet opened in the city of Riverside, and Brevard-Rodriguez agree on one thing in particular—they want their businesses to turn a profit before embarking on consumption lounge expansions.

Nevada is one of the states that is farthest along in consumption lounge progress, with numerous licenses approved. Many of these lounges are still either building their lounges or fulfilling strict rules for proper ventilation or other important requirements. Planet 13 in Las Vegas, Nevada released a press release in November 2023 touting an April 20, 2024 release date.

While the state legislature legalized cannabis consumption lounges back in 2021, Clark County commissioner Tick Segerbloom told 8NewsNow that 2024 is going to be “the” year. “It really is going to be a big year. And a big part of our economy,” Segerbloom continued.

Nevada Cannabis Association executive director Layke Martin added that this is new territory for business owners, and they’re learning as they go. “Remember no one has really done these before. Certainly not here,” Martin said. “It’s ventilation, it’s security, it’s safe consumption and driving, it’s training. Those are the types of regulations that we’re talking about.”