As new adult-use programs launch, many entrepreneurs are eager to start growing, processing, or selling cannabis. Excitement runs high, but the industry’s heavy regulations and complex operations can quickly overwhelm even experienced business owners. Common mistakes include underestimating compliance requirements, rushing facility design, skipping proper procedures, and more.
The Minnesota Lottery for cannabis business licenses reached a pivotal milestone on June 5, as the Office of Cannabis Management (OCM) conducted randomized drawings for select license types. These lotteries were open to both social equity applicants and general applicants vying for limited licenses to operate as cultivators, manufacturers, and mezzobusinesses. Additionally, a separate lottery was held exclusively for social equity applicants seeking a retail cannabis license.
New Jersey’s adult-use law allows “cannabis consumption areas,” but only as an endorsement to existing licenses. The Cannabis Regulatory Commission (CRC) decided not to create a new license class; instead, licensed Class 5 retailers (or permitted medical dispensaries) can apply for a Consumption Area Endorsement to their facility. This means only approved dispensaries (currently still coming online in NJ) can add a 21+ onsite use room. Applications for consumption area endorsements opened in January 2025.
New Mexico’s Cannabis Regulation Act (2021) explicitly authorizes On-Site Consumption Area licenses (often called “consumption lounge” permits) under the NM Cannabis Control Division (CCD). The CCD issues two types of permits: Type I (non-smoking, edibles/vapor) and Type II (smoking allowed). A consumption area license lets a venue legally serve non-infused snacks/beverages and allow consumption of cannabis products by patrons age 21+. These can be standalone lounges or add-ons to other licensees (e.g. a dispensary or restaurant that obtains a consumption license).
New York State law provides for adult-use on-site consumption licenses under the Office of Cannabis Management (OCM). As of 2025, New York is still in the early stages of issuing these licenses; only a handful of trial licenses have been granted. The Cannabis Law caps investment (no person can hold more than 3 consumption licenses) and prohibits vertical integration: lounge licensees cannot also hold dispensary, cultivation, or processor licenses. This was done to ensure lounges operate solely as consumption venues, not as sales outlets. Learn how to navigate the rules to successfully apply for your lounge license.
Nevada has enthusiastically embraced consumption lounges. In 2021, Governor Sisolak signed AB 341 authorizing the Nevada Cannabis Compliance Board (CCB) to license cannabis consumption lounges. After extensive stakeholder work, the CCB approved final regulations in late 2023. Lounges are split into two types: Retail Lounges (operated by licensed dispensaries or microbusinesses) and Independent Lounges (standalone sites).
Missouri’s adult-use legalization (Amendment 3, 2022) did not establish any state license for cannabis lounges. Consequently, there is no state-regulated consumption lounge for recreational cannabis at this time. Instead, an underground network of private, membership-only clubs has emerged.
Minnesota’s adult-use cannabis law (2023) does not create a permanent lounge license, but it allows temporary consumption events via a Cannabis Event Organizer license for up to four-day events (like festivals) where licensed retailers can sell cannabis and patrons may consume on-site. A licensed event organizer must obtain local approval and permits for each event.
Michigan law explicitly recognizes and licenses cannabis “Designated Consumption Establishments.” These are commercial venues where adults 21+ can legally consume cannabis products on-site. The Michigan Marijuana Regulatory Agency (MRA) issues Consumption Lounge Licenses to qualified entities. Pursuant to state rules (MRTMA and R 420.21(3)), any person or business that allows on-site cannabis use in exchange for a fee or membership must hold this license.
