How to Open a Cannabis Cafe in California

There's a serious buzz around Southern California's first cannabis restaurant, Lowell Farms: A Cannabis Cafe. The restaurant/cannabis consumption lounge's opening date is scheduled for September 24, and online reservations for Lowell's first 30 days sold out within three hours. But the opening presented some legal challenges, and Lowell's owners found themselves in an odd position. In order to comply with state law, they had to split Lowell Farms into two separates businesses: a restaurant and cannabis retail establishment.

Current regulations in California don't allow cannabis consumption lounges to sell food or beverages on the premises. That leaves Lowell Farms and the seven other businesses that secured cannabis consumption lounge licenses in West Hollywood with an awkward dilemma. The licenses specifically allow smoking and vaping, but not direct sales of cannabis-infused food or drinks, which takes away a potentially significant income-generator.

Lowell Farms needed a way to sell prepared food and drinks to customers who were partaking in smoking or vaping cannabis. So Lowell did what any enterprising business would do, performing creative workarounds to stay within the law.

Customers likely won't even notice Lowell's dual business model, minus a few details. Lowell's team simply shifted operations and re-zoned the business to appeal to smokers and non-smokers alike. The entire space now has three different sections on a 20,000 square foot lot, which includes:

• A 1,600 square-foot cafe where diners cannot consume cannabis, but can order food and non-alcoholic beverages.
• A 2,500 square-foot indoor lounge that allows cannabis smoking, vaping, and edible consumption.
• An 1,800 square-foot outdoor garden where cannabis edibles, vaping and smoking cannabis are allowed.

The City of West Hollywood's community and legislative affairs manager, John Leonard, spoke about how the new cannabis consumption lounge developed solutions.

"Lowell created two separate businesses on two separate premises," says Leonard. "They've segregated their kitchen, and they are preparing food in that kitchen. There's a separate dining area attached to the kitchen that's considered a separate business from the cannabis consumption area. With that being said, patrons in the cannabis consumption area are allowed to order food from the adjacent restaurant. And the food from the adjacent restaurant is delivered to the consumption area."

Lowell Farms restaurant and cannabis consumption lounge layout

Lowell Farms website

According to Lowell Cafe's restaurant director, Kevin Brady, the La Brea street-facing area (in blue on the map above) is simply a cafe open to the public.

Then there's the cannabis consumption areas, which are the green and brown areas on the map. Lowell Farms also had to separate the main entrance to the bathroom to follow state and local regulations for two adjacent businesses. Finally, customers who eat and drink while vaping/smoking will receive two separate checks at the end of their service.

These adjustments come at a high cost. State cannabis regulations change frequently, often leaving most cannabis businesses in limbo. But Brady sees some of these changes as a benefit. "This sends up costs for the business, but it gives us the opportunity to operate differently and pave the way." says Brady. "(The regulations) forced us to make changes throughout the business, but this is a learning experience from both ends in this uncharted territory. These challenges made us adjust and adapt to become (LA's) first-of-its-kind cannabis restaurant."

Leonard sees future cannabis consumption lounges that serve food will need to invest more to stay within legal boundaries. "This forces two separate businesses to spend additional money and do additional work just to prepare food on-site," says Leonard. "It worked out well for Lowell because of how the building was designed. But this won't necessarily work as well in other locations. [The law] hamstrings other businesses from opening because they need to find suitable locations, or find a location and spend substantial amounts of money to make it work," Leonard says.

On the state level, there's an amendment floating around the California legislature that would assist cannabis consumption lounges like Lowell Cafe. Assembly Bill 1465 would permit cannabis consumption lounges to serve food and beverages, but it's been stalled since spring. Plus, there is slim likelihood of AB 1465's passage by the session's end on September 13, according to Leonard. He stated that a regulatory fix within the Bureau of Cannabis Control is a better long-term option, but that can take anywhere from six to nine months. It's far more likely that the California Assembly will take up AB 1465 when it reconvenes in January 2020.

Lowell Farms : A Cannabis Cafe. 1201 N La Brea Ave, West Hollywood, CA

• Here's Everything to Know About LA's First-Ever Cannabis Restaurant [ELA]

How to Open a Cannabis Cafe in California

Source: https://la.eater.com/2019/9/11/20853095/west-hollywood-cannabis-consumption-lounge-restaurant-state-regulations

Share this post