Colorado’s cannabis cafes aren’t as lucrative as first anticipated

Bethan Rose Jenkins, Cannabis News Writer/Editorial

The new scene of cannabis social cafes in Colorado got off to a good start. However, it seems that the hype has slowed down and lounge owners aren’t reaping the rewards they might have hoped for.

Colorado kickstarted the cannabis social cafe movement following the passing of House Bill 1230 on May 2, 2019. The bill that was approved in the Colorado Legislature had previously been amended in the House. With this approved version, cannabis social lounges were given the go-ahead.

Despite being legal for recreational purposes since late 2012, HB 1239 marked the first occasion on which it became legal to consume the plant in social spaces. Unfortunately, the outcome has been a bit of an anticlimax for cannabis lounge owners in Colorado.

“We’re very happy to have them, they just aren’t profitable,” said the owner of Denver-based cannabis cafe The CoffeeJointCo, Rita Tsalyuk.

All cannabis cafes in Denver require consumers to bring their own bud to the residence, where they can enjoy it with fellow plant connoisseurs. However, as a non-smoking environment, users can only “dab, use vape pens, and consume edibles.” 

Customer demand for Colorado’s cannabis lounges started off strong and subsided quickly

Although it was a joyous occasion when Colorado lawmakers enacted legislation permitting non-smokable cannabis consumption inside hospitality spaces, lounge owners are feeling disheartened due to poor regulation, according to Tsalyuk. Moreover, since cannabis products cannot legally be sold inside Colorado’s cannabis social lounges, there’s limited option for owners to make money. 

An influx of customers descended upon Colorado’s cannabis lounges during the early stages of operation, but Tsalyuk says that the demand subsided as time went by. According to Tsalyuk, lounge licenses can be obtained by just about anyone who qualifies as a suitable applicant. However, since the existing business model requires that the lounge be located next to a cannabis dispensary, Tsalyuk says that it “doesn’t work as a standalone.”

Change is on the horizon, but it doesn’t look like it’s going to transpire anytime soon. Currently, legislators are considering postponing a bill that would permit “retail [cannabis], retail [cannabis] concentrate, and retail [cannabis] products (to be) sold and consumed on site in the establishment’s hospitality space.”

Coloradans can consume their bud inside various social consumption lounges 

Just two cannabis consumption lounges in Colorado have received licensing from Denver’s Cannabis Consumption Establishment program. However, one of Denver’s lounges has already closed for business. Despite a lack of licensed consumption lounges in the city, the following legal social spaces have managed to fall under the radar:

  • Bodega on 1270 West Cedar Avenue
  • Tetra 9 Private Lounge and Garden on 3039 Walnut Street
  • The International Church of Cannabis on 400 South Logan Street
  • Arrowhead Manor on 9284 Highway 285, Morriso
  • Adiago on 1430 Race Street
  • Spectra Art Space on 1836 South Broadway
  • Cultivated Synergy on 2901 Walnut Street

While it might not be profitable – for now, at least – cannabis consumption lounges could have various benefits in Colorado. For example, public consumption could be better regulated, black market activity could be dampened and the economy could be strengthened if more lounges are allowed to begin operating statewide.