Starting Jan. 1, Coloradans will have more options for consuming cannabis in public. But will we catch up to California?
From eye-level, Tetra Lounge looks like an upscale coffee shop rolled into a nightclub.
Brick walls, painted white, box in DJ booths and a bar, while attractive glass cases and furniture dot the 2,000-square-foot space at 3039 Walnut St. in the River North Art District.
But look down and you’re suddenly in a weed dealer’s apartment from the black-market era of cannabis: plush but worn couches, video game controllers, scattered bits of bright-green leaves, and a friendly, roaming Rottweiler named Kena.
That feeling is intentional.
“The vibe is supposed to be more like your initial cannabis interaction, where the first time you smoked weed was in your friend’s basement or garage,” said owner Dewayne Benjamin, who opened Tetra in February 2018. “But it’s obviously more social than that, and very safe.”
In that way, Tetra is a synthesis of old and new pot culture, combining the bong rips and couch-locked diversions of old with the chic, discerning and proudly public persona of contemporary cannabis. Tetra sidesteps 2006’s Colorado Indoor Clean Air Act, which banned smoking in most public, indoor spaces, by acting as a private club that sells daily memberships for $20 a pop (or $60 per month).
Benjamin said he’s sold about 12,000 memberships since Tetra first opened nearly two years ago.
“Its 70% tourists with one-day and three-day memberships, and 30% regular monthly members,” he said.
But even as Benjamin looks to his next experiment — a tea house-style partnership with The Joint dispensary, in which a purchase at The Joint covers Tetra’s membership fee — the laws that govern social cannabis use are about to change again.
Starting on Jan. 1, House Bill 1230 will allow two entirely new types of businesses in Colorado: tasting rooms that can sell cannabis flower and cannabis products, and “marijuana hospitality establishments,” which can’t sell cannabis on-site but allow full use of the plant (including on tour buses).
Officials in Denver and other cities have not yet declared overarching stances on the issue, but the laws are likely to encourage a new green rush — once businesses meet certain standards.
The flipside of allowing anyone to apply for a license is that the state has granted ample discretion to individual municipalities, allowing them to decide where and how these new businesses operate, if at all. Application fees range from $1,000 for a hospitality business to $5,000 for a retail hospitality and sales operation. Once granted, operators are barred from holding a liquor license for the same business.
“We have a rich history of home rule in Colorado, and this legislation is no different,” said Shannon Gray, spokeswoman for Colorado’s Marijuana Enforcement Division. “It’s up to local jurisdictions to decide if they want this within their borders.”
The new rules, signed into law by Gov. Jared Polis in May, include House Bill 1234, which allows for commercial home delivery of cannabis. But the biggest deal is undoubtedly the consumption rules. Ever since Amendment 64 legalized statewide retail sales, growth and possession of pot in 2014, residents and especially tourists have been forced to find creative ways to consume their weed in the absence of any legal, public option.
Denver spots such as The Coffee Joint and Vape and Play have allowed vaping and THC-edibles consumption on their property, but no smoking. Others have tried and failed, such as Dean Ween’s Honeypot Lounge, which at one point promised a “bongtender” and various paraphernalia for use. The Ballpark-area location never got off the ground, and Ween (aka musician Mickey Melchiondo Jr.) later partnered with Vape and Play at a location that has since closed.
“One of the challenges with that is the profit model, because it’s bring-your-own-cannabis, and not sales like the new hospitality bill will allow,” said Eric Escudero, communications director for Denver’s Department of Excise and Licenses, which will review pot-lounge applications. “But anything we do is not going to happen overnight. We have to go through the process first of considering social equity, and then any new law or marijuana expansion has to go through a public approval process.”
The Coffee Joint, Denver’s first (and currently only) publicly licensed social marijuana-use business, submitted its application to the city on Dec. 20, owner Rita Tsalyuk said. The Coffee Joint must reapply in order to keep operating under the new rules.
Colorado residents can get high on their own property, of course. And long-running events such as Puff, Pass & Paint, a “cannabis-friendly art class,” double as community smoking sessions. Cannabis cooking classes, party buses, dispensary tours, yoga and “420-friendly” hotels have also filled in the gaps over the past five years.
“As long as you’re not selling (pot) and you’re in a private residence, you’re fine,” Puff, Pass & Paint founder Heidi Keyes told The Cannabist in 2014.
But tourists have often defaulted to vaping or gobbling THC-laced edibles, since that doesn’t produce the skunky smoke that serves as the dead-giveaway of smoking joints, bongs or bowls. That’s led to Colorado falling behind California in social consumption laws — despite Colorado being hailed internationally for pioneering recreational cannabis in the first place.
That’s especially apparent as dozens of other states have jumped into the legal weed game after us — Illinois begins recreational sales on Jan. 1, and in Michigan, consumers lined up at pot shops on Dec. 1, the day recreational sales became legal there.
West Hollywood, Calif.’s Lowell Cafe, which opened in October, bills itself as the country’s first cannabis-friendly restaurant. However, due to current laws there, Lowell Cafe’s owners had to find a creative workaround, as Rolling Stone called it, since laws don’t allow licensees to sell food or drinks on-site at a cannabis retail business.
Lowell’s answer was to separate the cafe into three sections, Rolling Stone reported: “a street-facing area where diners can’t consume cannabis, but can order food and non-alcoholic drinks, and an indoor lounge and outdoor garden that allow cannabis smoking, vaping and edible consumption.” Food and drinks are made in a kitchen that’s considered a separate business, which allows people in the smoking section to order food from the adjacent restaurant.
So if Colorado beat California in the legal-weed game by a couple of years (California’s recreational laws took effect in 2016), what’s stopping Colorado from seeing similar concepts?
“It’s not for lack of interest on the entrepreneurial side,” said Jeremy Jacobs, whose Kentucky-based company, Enlighten, supplies digital menus and in-house ads for 1,200 dispensaries nationwide, including 100 in Colorado. “People have tried to open coffee shops and consumption lounges only to get raided a week later. It’s your authorities that have caused this issue, singlehandedly. There’s no one else to blame.”
One of Jacobs’ solutions is the Cannabus, which he debuted this month at MJBizCon in Las Vegas. The upscale coach sells cannabis in the front and offers a smoking lounge in the back. Jacobs wants to take it on a multi-state tour — including to the steps of Colorado’s state capitol — to show legislators that cannabis businesses can be as friendly, safe and lucrative as craft breweries.
“Most lounges aren’t some dark and dungeon-y place with black lights and Hendrix posters,” said Jacobs, who closed a $6.5 million round of funding for Enlighten’s digital network in June. “In fact, I would argue cannabis is building some of the better retail establishments, period, because they have much better concepts.”
Barbershops, fitness centers, music venues, VR arcades, yoga studios and other hybrid-cannabis businesses could flourish under the new consumption rules, Tetra’s Benjamin said, provided they follow the enshrined, 21-and-up rules of Amendment 64.
“Since we’ve opened, we haven’t had any public safety issues — like fights, violence, people passing out — and no contact with authorities,” he said of Tetra Lounge.
A Denver Post review of Denver Police Department service calls to Tetra’s address since February 2018 found no criminal complaints related to the business. That’s something Benjamin is proud of, and he cites it as proof of concept.
“That’s on the consumer side,” he said. “But on the business side, we’ve been able to thrive because we offer a marketing platform for business-to-consumer interaction.”
At Tetra, that takes the form of displays set up by various vendors and dispensaries to advertise their wares. The marketing partnership also encourages weed-friendly hotel concierges and budtenders at dispensaries to send people to Tetra as a safe alternative to consuming in their cars, hotel rooms or on the street.
Even with steep rent on his lounge — about $6,500 per month — Benjamin has seen success with Tetra, he said. But he’s excited to apply for a license to become a fully public hospitality business, since he’s noticed a wide market for cannabis consumers.
“You’ll see a 21-year-old black dude talking to an 80-year-old white lady for hours,” he said. “There’s not one demographic that buys or enjoys cannabis. And as one of the few African-American cannabis company owners, I want it to be all-inclusive.”
The new laws may also lead to different types of consumption businesses that are only now being considered, said PJ Rinker, vice president of business development at Denver-based Cannabis One, which operates The Joint dispensaries.
“We ultimately see someone like Dewayne (Benjamin) having the Jamba Juice of weed, where you can enjoy the full spectrum of the plant and consume more than just THC or CBD,” Rinker said.
Benjamin isn’t worried about competition to Tetra when the hospitality laws take effect Jan. 1.
“This industry is less than a decade old, and there’s no going back,” he said. “This will benefit all of us.”
And when it comes to bragging rights and reputation, Colorado still has a shot at reclaiming its No. 1 spot in the fast-moving world of legal cannabis, Enlighten founder Jacobs said.
“Even though California was easily positioned to take the cannabis crown, they’ve done an excellent job of screwing that up recently with the extremely slow roll-out of their licenses,” he said. “Colorado has a chance to say, ‘Here’s what the future looks like: it’s like a much nicer bar scene, but nobody’s getting DUIs or crashing cars.’ That’s the potential in this law.”
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