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Cannabis Consumption Lounges: Which States Permit On-Site Use in 2025?

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Cliff Notes: Cannabis Consumption Lounges: States Permitting On‑Site Use in 2025

Definition: Social venues where adults consume cannabis on‑site, separate from retail sales.
History: Alaska pioneered statewide rules in 2018; the first U.S. lounge opened in West Hollywood in 2019.
Legal Landscape: As of 2025, 14 states+ USVI permit consumption lounges at various levels.

Key States:

  • Alaska, California, Colorado: Early adopters with detailed endorsement processes.
  • Nevada, New Jersey, New Mexico: Explicit lounge license or endorsement frameworks.
  • Others (DC, Illinois, Maryland, Michigan, Minnesota, Missouri, New York): Local opt‑ins or medical‑only models.

Operational Needs: Zoning, ventilation, security, age‑checks, and separation of sale/consumption areas.

Connect with Catalyst BC’s cannabis consultants to guide site selection, licensing, build‑out design, and compliance to speed launch and minimize risk. Explore our services or contact us today for a Complimentary Consultation.

Introduction

Across much of the U.S., legally consuming cannabis is restricted to private residences—and even then, landlords or HOAs often ban it. Although retail sales of cannabis are legal in several jurisdictions, only a handful of public venues let adults consume their purchases on-site.

What Are Cannabis Consumption Lounges?

Consumption lounges are social spaces where patrons can legally use cannabis products—flowers, pre-rolls, edibles, and more—within a designated area separate from the sales floor. Some operate as “BYO” venues where guests bring their own supply, while others are retail-plus-lounge models that sell and allow on-premises use.

Alaska led the way in December 2018, when its Marijuana Control Board rolled out statewide rules for on-site consumption. But it wasn’t until 2019 that the Original Cannabis Café in West Hollywood became America’s first social lounge. Since then, more states have drafted their own frameworks to permit these communal spaces.

Currently, cannabis consumption lounges are making waves across the United States and the U.S. Virgin Islands, that have legalized social cannabis consumption on some level, – Alaska, California, Colorado, DC, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico and New York.

U.S. Virgin Islands

Three permit types authorize on-site adult-use consumption: a permanent lounge permit, an on-site use permit, and a temporary use permit. Dispensary licensees may operate adult-use lounges but cannot sell cannabis or accessories there.

Learn about all of our cannabis consulting services tailored for USVI.

Alaska

In late 2018, Alaska regulators approved endorsements for retailers to add consumption areas. By January 2020, two dispensaries had secured the first state licenses for on-site use.

California

A 2018 law lets local governments authorize smoking, vaping, and ingesting on retail or microbusiness premises. By 2022, about a dozen lounges had opened—mostly in San Francisco and Oakland—with projections of 20–30 spots statewide in the coming years. Effective January 1, 2025, Assembly Bill 1775 also permits these venues to serve non-alcoholic food and drinks and host ticketed live events.

Colorado

House Bill 19-1230 (2019) directed the Marijuana Enforcement Division to license hospitality and sales venues. Since January 2020, opt-in municipalities can issue these licenses. Denver rolled out its first hospitality permits in March 2022, banning alcohol and minors. In 2021, the city added “mobile hospitality” licenses; as of mid-2023, three operators have applied to serve 21+ patrons in mobile lounges.

District of Columbia

Retailers may add a “Medical Cannabis Safe Use Treatment Facility” endorsement to let patients consume medical cannabis on-site in designated areas.

Illinois

The Cannabis Regulation and Tax Act authorizes local governments to approve BYOC consumption lounges. Luna Lounge in Sesser launched in 2021 as the state’s first, followed by a Chicago-area lounge in Lake County in 2022. In 2023, Wheeling granted Cook County’s first recreational consumption permit.

Maryland

Under House Bill 0566 (May 2023), Maryland legalized up to 15 “designated-use” cafes where patrons may consume pre-purchased cannabis but not buy products on-site. The first opened in Burtonsville in March 2023.

Massachusetts

A 2019 “social consumption” pilot could have allowed cafes in up to 12 towns; in 2023, regulators scrapped the pilot to focus on a full licensing scheme for all social venues.

Michigan

Licensed “designated consumption establishments” can permit BYO use but not sell cannabis on-site. The first recreational lounge opened in March 2022; by April 2023, three were operating statewide.

Minnesota

Holders of a state Microbusiness license may designate a section of their premises for on-site edible consumption.

Missouri

The DHSS rules enable public-place owners to create enclosed private rooms where qualifying medical patients can consume their own cannabis—sales aren’t allowed on-site.

Nevada

Assembly Bill 341 (June 2021) empowers the Cannabis Compliance Board to license up to 65 lounges—40–45 attached to dispensaries and 20 independent—with 10 slots reserved for social-equity applicants. Twenty applications were filed in October 2022; in June 2023, the first three lounges received approval, including two in Las Vegas.

New Jersey

Opening a lounge requires both state and municipal sign-off, and it must adjoin a dispensary. Food and drink sales are prohibited. Jersey City and Atlantic City have enacted ordinances, and the first lounge is slated to open this year.

Learn about all of our cannabis consulting services tailored to New Jersey.

New Mexico

The Cannabis Regulation Act allows localities to approve consumption areas that meet specified standards. By July 2023, nearly 20 lounges had state authorization, though not all are operational.

Learn about all of our cannabis consulting services tailored to New Mexico.

New York

Social consumption lounges are permitted only in municipalities that opt in under the state’s legalization law.

Learn about all of our cannabis consulting services tailored to New York.

Conclusion

As more states embrace social consumption, cannabis lounges are becoming key spaces for connection, culture, and commerce. Staying informed on evolving regulations is essential—but having the right guidance makes all the difference.

If you’re ready to bring your cannabis lounge vision to life, partner with Catalyst BC. Our expert Cannabis Consultants are here to help you navigate the licensing process and build a compliant, community-focused space from day one. Explore our services or contact us today for a Complimentary Consultation.

Cannabis Consumption Lounge FAQs

What permits and licenses are required to open a cannabis consumption lounge?

Opening a consumption lounge typically involves securing both a retail dispensary license and a special on-site consumption endorsement (or its state equivalent). You’ll need to submit detailed applications covering ownership, security plans, community impact, and local zoning approvals. Our Cannabis Consulting team guides you through every regulatory hurdle—from preparing your application packet to liaising with state and local agencies—so you can launch smoothly and legally.

How do I select the right location for a cannabis lounge?

Choosing a location means balancing foot traffic, local zoning restrictions, and community acceptance. You’ll need to evaluate competing land uses (schools, parks), parking availability, and neighborhood sentiment. Our experienced Cannabis Consultants can conduct site feasibility studies, demographic analyses, and municipal outreach to identify optimal properties that align with your business goals.

What are the key facility design and build-out considerations?

Your lounge must separate consumption areas from retail/point-of-sale, ensure proper ventilation, and comply with ADA and fire-code requirements. Design elements like seating layouts, lighting, and ambiance also impact customer experience. Our Cannabis Consulting resources include leveraging architects and engineers to help develop compliant floor plans, ventilation specifications, and build-out budgets—streamlining your design-to-construction process.

How can I ensure ongoing regulatory compliance?

Once open, you must maintain strict inventory tracking, perform routine audits, train staff on consumption rules, and stay current on evolving regulations. Non-compliance can lead to fines or license revocation. Catalyst BC’s Cannabis Consultants deliver customized compliance programs—including SOP development, staff training, and audit support—to keep your lounge operating within the law.

What security measures are required for a cannabis consumption lounge?

Expect requirements for 24/7 video surveillance, alarm systems, secure inventory storage, and controlled customer access points. Some jurisdictions also mandate on-site security personnel. We provide security risk assessments and vendor recommendations, helping you implement camera layouts, alarm integrations, and guard staffing plans that satisfy regulators.

What insurance coverage should I carry?

Common policies include general liability, product liability, property insurance, and professional liability. You may also need specialized cannabis event coverage if you host ticketed experiences.

How do I develop a menu of on-site consumption options?

Decide whether you’ll be strictly BYOC (bring your own cannabis) or offer on-site products (edibles, pre-rolls). Factor in product sourcing, lab-testing requirements, and consumption method regulations (vape vs. flower). Our Cannabis Consultants will work with your procurement and compliance teams to establish vendor agreements, verify product safety standards, and create an appealing menu that meets all legal guidelines.

What staff roles and training are essential?

You’ll need budtenders, compliance officers, security staff, and hospitality personnel. Comprehensive training on cannabis laws, responsible consumption, and customer service is critical. Our cannabis consultants can assist with designing customized training programs—covering regulatory updates, ID verification, and over-consumption protocols—so your team delivers a safe and exceptional guest experience.

How do I market and promote a cannabis consumption lounge?

Marketing must comply with advertising restrictions (no targeting minors, avoiding certain media). Successful strategies include influencer partnerships, local community events, and non-cannabis food & beverage promotions (where allowed). Tap into our Cannabis Consulting team to develop compliant brand guidelines, digital campaigns, and community engagement plans that drive awareness and foot traffic without running afoul of advertising rules.

Why should I work with a Cannabis Consultant like Catalyst BC?

Navigating the cannabis lounge space is complex—one misstep can delay your opening or jeopardize your license. A specialized Cannabis Consultant brings deep regulatory knowledge, operational best practices, and hands-on project management.

From initial concept and licensing to grand opening and ongoing compliance, Catalyst BC’s end-to-end Cannabis Consulting services ensure you launch faster, stay compliant, and maximize profitability.

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