Cannabis lounges in Nevada, once anticipated as a major attraction for tourists seeking a unique cannabis experience, are facing significant challenges. Despite over 99 applicants for state-regulated lounges, only one has managed to stay open since the concept was introduced in 2021. This single functioning lounge, Dazed!, located within the Planet 13 Dispensary, has become an outlier in a sector that has not met expectations.
The initial vision for these lounges included creating vibrant social spaces reminiscent of Amsterdam, where visitors could enjoy cannabis in a hospitable environment. However, the reality has proven quite different. Since the lounges opened, Nevada’s legal cannabis sales have dropped by 17% from 2021, reflecting a larger struggle within the industry to attract consumers.
Experts attribute the failure of the lounges to several factors: stringent regulations, high startup costs, and a lack of consumer interest. Christopher LaPorte, a partner at RESET Hospitality, advises that the current business model should evolve. He suggests that lounges must appeal to a broader audience beyond the traditional cannabis consumer.
According to Robin Goldstein, an economist who studies cannabis consumer behavior, lounges should offer more than just a space to consume cannabis. He argues that successful venues need to incorporate unique concepts to draw in customers. This sentiment was echoed when the Smoke and Mirrors lounge, which opened in February 2024, closed just two months later, indicating that the existing model was ineffective.
The Cannabis Compliance Board (CCB) reported that the overall taxable sales from retail cannabis locations in Nevada reached $829 million in the fiscal year ending June 2024, but this figure represents a decline from previous years. Only two lounges were operational last year, leading to concerns about the viability of the model.
While Dazed! remains open, the future of consumption lounges in Nevada looks uncertain. There are currently 21 additional lounges approved to open, but financial and logistical challenges have stalled their launch. Furthermore, ten licenses have been reserved for social equity applicants, but none have yet opened a lounge.
Cat Packer, a cannabis law expert, pointed out that the cannabis industry continues to face obstacles related to banking and financing, making it difficult for prospective lounge operators to secure the necessary capital. Additionally, the casino industry’s dominance in Nevada, which prohibits any connection between gaming and cannabis due to federal laws, complicates matters further.
James Humm, executive director of the CCB, stated that operators must meet specific financial requirements, including $200,000 in operational liquidity before opening. He acknowledged the challenges posed by economic conditions and zoning regulations, which make it difficult for applicants to find suitable locations.
The law permits lounges to offer cannabis consumption through smoking or non-alcoholic infused beverages, but not food. This restriction has led some industry professionals to advocate for a reevaluation of the business model. LaPorte suggests incorporating food and entertainment as part of the experience, similar to successful venues in Southern California that combine cannabis with dining and socializing opportunities.
Despite these challenges, Planet 13 is actively seeking to innovate by looking for restaurant partners to enhance its lounge offerings. The company has hosted several events featuring celebrities and uses promotional campaigns to encourage social media engagement.
As the cannabis market continues to evolve, the CCB remains committed to supporting the establishment of more lounges, but the path forward will require adjustments to regulations and a rethinking of what these venues can offer in order to attract a wider audience and achieve financial sustainability.
English 
Spanish 
German 
Czech