consumption lounge Archives - Green Market Report

StaffDecember 1, 2022
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5min10530

The Daily Hit is a recap of cannabis business news for Dec. 1, 2022.

ON THE SITE

Colorado Cannabis Industry Enduring ‘Largest Downturn’ in its History

One of the most mature cannabis markets in the United States, Colorado, is going through a financial crisis. The statewide industry is suffering a major sales dip that has been trending downward for the better part of a year, and insiders expect business casualties in coming months. Read more here.

Dutchie Co-Founders Step Down, Board Names New Leadership Team

Cannabis tech company Dutchie underwent a major leadership shakeup this week. The co-founding duo of Ross and Zach Lipson stepped down from their leadership posts at the privately held Oregon business, and the board of directors has named a new chief executive officer, chief financial officer, general counsel, and a vice president of engineering. Read more here.

Radient Technologies Deep in Debt, Trying to Swim Upward

Alberta-based cannabis extract maker Radient Technologies Inc. (TSXV: RTI) posted second-quarter results showing it either needs more cash flow or financing to keep the ship sailing. The company said it has overdue liabilities concerning rent, wages, long-term debt, and leases. Read more here.

Can Publicly Traded Bonds Keep the Cannabis Industry from Getting Smoked?

In 2021, cannabis companies racked up $1.65 billion in debt; in 2022, it skyrocketed to more than $5.62 billion of issued debt financing. Alarms are now going off because these loans are maturing, and payments are coming due. Since bankruptcy is not an option, what is the solution? Read more here.

Nevada Doles Out Consumption Lounge Licenses

Nevada picked 20 independent lounge licenses for businesses looking to build out new facilities for consumption lounges and sell product from other operators, with half of those licenses designated for social equity applicants. Read more here.

IN OTHER NEWS

New York

New York’s equity-focused rollout of its legal marijuana market relies heavily on a $200 million fund to support the state’s first retailers. Yet the team picked to raise and manage that money – an NBA Hall of Famer and a shoewear entrepreneur – have repeatedly failed to deliver on their biggest and boldest claims, including investing in entrepreneurs of color with a $100 million fund. Read the NY Cannabis Insider investigation here.

Minnesota

The Minnesota Department of Health will add irritable bowel syndrome and obsessive-compulsive disorder to the list of qualifying medical conditions for participation in Minnesota’s medical cannabis program. Under state law, the new qualifying conditions will take effect Aug. 1, 2023. Read more here.

Jacksons BevCo

CordovaCann Corp., a cannabis-focused consumer products and retail company, has forged a deal with Midwest retailer Jackson BevCo Inc. to facilitate the opening and operation of cannabis retail stores within or beside Jacksons convenience stores starting in 2023. Read more here.


StaffMay 24, 2022
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These consumption lounges are operating without licenses and it seems the city and state don’t care. Since the adult-use license program hasn’t been written and approved, these operations are technically violating the law. No law means no violations. So there really isn’t anything law enforcement can do. These lounges range from the first to market Happy Munkey to pop-up neighborhood lounges that are often located next to illicit street sellers. 

These lounges are in big demand since many people in New York live in small apartment situations and some landlords don’t even allow cigarette smoking within their buildings. So if you don’t want to sit in a park or smoke as you walk down the sidewalk, a lounge is a great place to go. Here are some of the top lounges in New York:

Happy Munkey

Happy Munkey is one of the first consumption lounges to open in New York City and is located in midtown. Vladimir Bautista is the co-founder and managing member of Happy Munkey LLC, an internationally-known NYC lifestyle company that is synonymous with cannabis culture. Happy Munkey hosts popular VIP events that connect politicians, chefs, doctors, influencers, athletes, and creative artists with each other based on a mutual love of the plant. The company hosted its biggest event with the immersive Van Gogh art installation. The club is member-only, but just about anyone can become a member. Vladimir and his partner Ramon Reyes, cohost the popular HappyMunkey on the Boulevard podcast where they bring the Happy Munkey to the masses. 

Astor Club

Astor Club is located on the Lower East Side of the city in a small club that has access to a back yard – a rarity in the city. Having this little outdoor space allows consumers to sit outside versus a smoke filled room. This is also a members-only club. Members pay approximately $200 a year and then are expected to buy an eighth of cannabis when they visit the club. It plays off the venerable New York society family – the Astors. Its tagline is “The highest club in high society.” It has a secure entrance and since the neighborhood is mostly Chinese immigrants, there is no desire to rat out the cannabis neighbors.

High Garden NYC

High Garden takes a different approach from the dark cannabis lounges like Happy Munkey and Astor Club. It is located in Tribeca and the hours are more like a restaurant. It operates on Wednesday evening until 10pm and then Sunday Brunch. The company also has a Chelsea location that operates from Wednesday to Friday 7pm-11pm. It promotes an “elevated experience.” There is a Studenglass bar for consumers to try these very expensive water pipes. Brunch often features live music or a DJ. More details on events can be found at the company’s instagram account @highgarden.nyc. Its tag line is “For those seeking a high-end lifestyle.”  


Andrew WardMay 24, 2022
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13min2450

New York’s adult-use cannabis market sales could generate between $2.2 billion and $2.7 billion by 2026. That figure could fall short if the Empire State falls trap to the thriving unlicensed market

A significant component of the sales could come from consumption lounges. The prospect of social consumption pot spaces piques the interest of numerous consumers and would-be operators. Many have already started buying. Consumers are unwilling to wait any longer, and finding shops isn’t a problem

Today, many dispensaries and lounges are about as out-in-the-open as possible, often using the state’s gifting laws or membership fees as loopholes. Regulators from the Office of Cannabis Management (OCM) have issued cease and desist warnings to temper the activity, but its effect doesn’t appear significant. 

How Many Unlicensed Shops Are There?

There is no public estimate on how many unlicensed lounges operate in New York City or the state. However, it’s clear that more than a handful of lounges sell cannabis and often offer a place to consume it

Those with legacy market connections may find an invite to private lounges set up at discreet stores or private residences. People unable to gain access to private lounges can still take part by breaking out Google Maps. Today, a search for a ‘marijuana lounge’ can produce over a dozen licensed and underground shops

“There are so many different types of lounges out there,” said Michael Zaytsev, Academic Director of Cannabis Degree Programs at LIM College. He likened the offering to coffee shops or bars, saying locations cater to all consumer types, from high-end gatherings to dive bar settings

The shops appear to get away without much police involvement, though often not far from the shops or trucks throughout the city. 

New York’s adult use cannabis market sales could generate between $2.2 billion and $2.7 billion by 2026. That figure could fall short if the Empire State falls trap to the thriving unlicensed market

A significant component of the sales could come from consumption lounges. The prospect of social consumption pot spaces piques the interest of numerous consumers and would-be operators. Many have already started buying. Consumers are unwilling to wait any longer, and finding shops isn’t a problem. 

 

Today, many dispensaries and lounges are about as out-in-the-open as possible, often using the state’s gifting laws or membership fees as loopholes. Regulators from the Office of Cannabis Management (OCM) have issued cease and desist warnings to temper the activity, but its effect doesn’t appear significant. 

How Many Unlicensed Shops Are There?

There is no public estimate on how many unlicensed lounges operate in New York City or the state. However, it’s clear that more than a handful of lounges sell cannabis and often offer a place to consume it

Those with legacy market connections may find an invite to private lounges set up at discreet stores or private residences. People unable to gain access to private lounges can still take part by breaking out Google Maps. Today, a search for a ‘marijuana lounge’ can produce over a dozen licensed and underground shops

“There are so many different types of lounges out there,” said Michael Zaytsev, Academic Director of Cannabis Degree Programs at LIM College. He likened the offering to coffee shops or bars, saying locations cater to all consumer types, from high-end gatherings to dive bar settings

The shops appear to get away without much police involvement, though often not far from the shops or trucks throughout the city

“Many are calling themselves CBD lounges or private clubs that have a paid membership to not draw attention,” said Kim Stuck, CEO and founder of compliance firm Allay Consulting. Stuck added that some operators choose to start underground to demonstrate a viable business ahead of licenses being determined. 

Impact On The Licensed Market

Sources say that cannabis products allegedly can come from untested, anonymous sources, unlicensed West Coast growers, or licensed operators, depending on the operation. No source would go on record to say as much. Still, several indicated that shops were financially backed by either legacy or licensed companies looking to enter the New York market before licensing was awarded

Frederic Abramson, a New York City lawyer practicing on-site consumption licensing for small businesses, reports that uncertain regulations and likely high cost of entry steers most from exploring on-site consumption licenses at this time

“The board’s very unclear about which direction they’re going right now,” he said, adding, “People don’t feel comfortable moving forward at all until there’s any kind of real regulation on the books.”

As Allay’s Stuck mentioned, some unlicensed shops hope to convert to the legal market. But, sources caution that route may not prove possible if they continue to shun regulator warnings.

Sources were torn on the fate of unlicensed lounge operators. Some speculated that those operators may find themselves out of luck when time comes to determine the state’s lounge license holders, if regulations even favored the current model taken up by most shops.

Stuck sees the outcome differently, predicting that the OCM creates pathways to convert shops. “I can’t wait to see the New York innovation kick in once these lounges are actually allowed and don’t have to hide,” she said

While excitement is high, the long struggle to launch in states like California, Nevada and other states could indicate what New York is up against. Between upset neighborhoods and to-be-enacted ordinances, the Empire State could find itself launching cannabis sales long before a lounge opens along with it

“Many are calling themselves CBD lounges or private clubs that have a paid membership to not draw attention,” said Kim Stuck, CEO and founder of compliance firm Allay Consulting. Stuck added that some operators choose to start underground to demonstrate a viable business ahead of licenses being determined. 

Impact On The Licensed Market

Sources say that cannabis products allegedly can come from untested, anonymous sources, unlicensed West Coast growers, or licensed operators, depending on the operation. No source would go on record to say as much. Still, several indicated that shops were financially backed by either legacy or licensed companies looking to enter the New York market before licensing was awarded. 

 

Frederic Abramson, a New York City lawyer practicing on-site consumption licensing for small businesses, reports that uncertain regulations and likely high cost of entry steers most from exploring on-site consumption licenses at this time. 

 

“The board’s very unclear about which direction they’re going right now,” he said, adding, “People don’t feel comfortable moving forward at all until there’s any kind of real regulation on the books.”

 

As Allay’s Stuck mentioned, some unlicensed shops hope to convert to the legal market. But, sources caution that route may not prove possible if they continue to shun regulator warnings.

 

Sources were torn on the fate of unlicensed lounge operators. Some speculated that those operators may find themselves out of luck when time comes to determine the state’s lounge license holders, if regulations even favored the current model taken up by most shops.

Stuck sees the outcome differently, predicting that the OCM creates pathways to convert shops. “I can’t wait to see the New York innovation kick in once these lounges are actually allowed and don’t have to hide,” she said

While excitement is high, the long struggle to launch in states like California, Nevada and other states could indicate what New York is up against. One company Planet 13 Holdings (OTC: PLNTH) has opened a restaurant within the dispensary but hasn’t opened its consumption lounge yet. NuWu Marketplace in Nevada operates one of the few dispensaries with a consumption lounge inside but that is because it is owned by the Paiute Tribe. Between upset neighborhoods and to-be-enacted ordinances, the Empire State could find itself launching cannabis sales long before a lounge opens along with it. 

 


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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