Cannabis Consumption Lounges: Addressing Concerns & Mitigating Risks
By Lauren Mendelsohn
June 26, 2023
Cannabis consumption lounges offer locations where adults (ages 21 and over) and patients can use cannabis products safely and legally (notwithstanding U.S. federal law, of course). They can provide an economic benefit by increasing tourism and bolstering tax revenue, and also serve an important equity purpose by providing spaces where residents of multi-unit housing can use cannabis without violating any anti-smoking policies that might apply to their living quarters.
Cannabis consumption lounges are regulated differently across jurisdictions, with some such as Colorado requiring a standalone license for lounge activities while others like New Mexico consider it part of a dispensary/retail use. Moreover, some states such as California allow every city and county to set their own policies when it comes to cannabis consumption lounges, resulting in a patchwork of inconsistent restrictions. We recently wrote about California’s Assembly Bill 374, which would expand the types of activities allowed at lounge facilities, on our blog here. A similar bill, SB-285, is making its way through the State Senate.
We frequently approach municipalities here in the Golden State encouraging them to consider allowing cannabis consumption lounges within their borders, and the most frequent questions we get have to do with the potential public safety risks. This post will discuss these risks and liability issues involved with cannabis lounges, as well as best practices to address these concerns.
Liability
Although the case law on this specific subject is yet to develop, courts will likely determine that cannabis consumption lounges are at least partially liable for injuries caused by an intoxicated patron after visiting the lounge. This is similar to how bars and other alcohol-serving establishments are treated under “dram shop” laws, which typically allow parties who are injured by a visibly intoxicated person to sue the alcohol provider. Certain jurisdictions, such as California, place some limitations on this such as restricting such suits to establishments who serve alcohol to intoxicated minors. (See Cal. Business & Professions Code §25602.1; Cal. Civil Code §1714.)
Some experts think that cannabis consumption lounges will lead to the development of “gram shop” laws specifically regarding the limits of lounge liability in the event that an intoxicated patron causes harm. Such has not yet happened; and as is the case with laws governing liability for alcohol-serving establishments, the extent of any protections will likely vary from state to state.
Therefore, lounge operators should be aware of this potential risk, and should consider having patrons sign valid liability waivers that are vetted by competent legal counsel. In particular, such waivers should include clear language regarding assumption of risk and indemnification. Furthermore, given the potential liability at stake, consumption lounges should take reasonable measures to reduce the likelihood of the other risks mentioned below such as refraining from serving minors, recognizing the signs of over-intoxication, and having a good insurance policy.
Intoxicated Patrons
One of the biggest concerns with cannabis consumption lounges is the fear that patrons will consume too much cannabis and then cause injuries, either via vehicle accidents, unruly behavior, or other impulsive actions. Lounge employees should be trained to spot signs of over-intoxication and stop serving patrons who’ve had too much. Prior to entering the consumption area, all patrons should sign off on written lounge policies that prohibit driving while intoxicated, and conspicuous signage should be posted inside the lounge to this effect. Additionally, lounge operators should provide information about rideshare services and taxis so that patrons who fall into this category are able to get to their next destination. Facility operators should consider temporarily or permanently barring patrons who fail to consume responsibly or who violate other posted rules.
A related concern has to do with the effect of combinations – i.e., combining multiple cannabis products, combining cannabis products with food or drinks that might be available at the lounge, and combining cannabis and alcohol and/or tobacco. With regards to combining various cannabis products, lounge operators should make sure that information about dosage and onset time is provided for all cannabis goods which they provide, and should also post signage warning patrons to go “low and slow” in terms of their consumption. Similar reminders about combining cannabis with food or drinks should also be provided, with an additional note to exercise care with food or drinks containing allergens.
Additionally, laws governing cannabis consumption lounges typically prohibit the sale and consumption of alcoholic beverages and tobacco on the premises. Thus, it would be very unlikely for a lounge patron to be combining cannabis with alcohol and/or tobacco while in a lounge environment, and employees should quickly put an end to alcohol or tobacco use observed at the facility.
Consumption lounges may also consider limiting the amount of time each patron is allowed to spend at the facility, so as to prevent over-consumption and deter loitering. A caveat to this is that patrons who consume edible cannabis products at the lounge might not feel the effects for a while, in which allowing longer visits makes sense. There is no right or wrong answer to how much time someone should spend at a lounge, since everyone reacts to products differently; the critical factor is preventing over-intoxication.
Underage Consumption
Another common concern related to cannabis consumption lounges has to do with the potential for underage consumption. However, these facilities pose no more of a risk of underage consumption than dispensaries, as patrons are required to show valid identification demonstrating they are of legal age prior to entering the consumption lounge. Such ID checks do not occur outside of the regulated marketplace.
Consumption lounge operators should ensure that their staff is properly trained to ask for ID prior to allowing patrons into the consumption area, and prior to providing or serving patrons with any cannabis. A record of patrons should be maintained along with the name or employee ID number of the staff member who reviewed their ID and the date and time of the patron’s visit. In the event that a minor attempts to gain access to the consumption lounge after being explained the age restriction, staff should take appropriate actions to safely remove the minor from the premises. Additionally, conspicuous signage should be displayed stating that underage consumption is prohibited.
Air Quality Concerns
Another common concern with cannabis lounges has to do with the air quality in these facilities. Many jurisdictions have laws restricting indoor smoking which may pose a challenge to cannabis consumption lounges. However, some have also developed requirements specifically for cannabis consumption lounges which are designed to maintain high air quality standards and mitigate odors while still allowing smoking, vaporizing and/or dabbing to take place. These requirements typically involve an engineered odor control system designed by a qualified professional which may consist of carbon filtration, negative pressure, odor neutralizers, and similar technologies.
A good example of how to regulate consumption lounge odors and air quality is the City and County of San Francisco, which issues special cannabis consumption lounge permits through its Health Department, and has promulgated specific regulations for these facilities as well as requirements for smoking room ventilation.
Proper Warnings
Yet another concern surrounding consumption lounges has to do with providing other warnings that may be required by a state or local jurisdiction. For example, California’s Proposition 65 has specific warnings, set forth in Title 27 of the California Code of Regulations, which must be provided in designated cannabis smoking, vaping, or dabbing areas in accordance with the following (27 C.C.R. §§ 25607.46 – 25607.47):
25607.46. Cannabis (Marijuana) Smoke or Delta-9-THC Inhalation Exposure Warnings (Environmental Exposures) – Method of Transmission.
(a) A warning for environmental exposures to cannabis (marijuana) smoke or delta- 9-tetrahydrocannabinol (delta-9-THC), in the ambient air in designated smoking, vaping, or dabbing areas meets the requirements of this subarticle if it complies with the content requirements in Section 25607.47 and is provided on an 8 1/2 by 11-inch sign printed in no smaller than 22-point type and enclosed in a box posted both at the entrance to and within the area in which the exposure occurs. In all cases, warnings must be readable and conspicuous to customers.
(b) If consumer information is provided by the business in the designated smoking,
vaping, or dabbing area in any language other than English, the warning must be
provided in that language in addition to English.
(c) A warning for environmental exposures to cannabis (marijuana) smoke or delta-9- THC, in the ambient air in designated smoking, vaping, or dabbing areas provided prior to October 1, 2023, is deemed to be clear and reasonable if it complies with either of the following:
(1) One or more of the methods of transmission in Section 25604 and the content set out in Section 25605; or
(2) The methods of transmission in subsections (a) and (b), and the content set out in Section 25607.47.
Note: Authority cited: Section 25249.12, Health and Safety Code. Reference: Sections 25249.6 and 25249.11, Health and Safety Code.
25607.47. Cannabis (Marijuana) Smoke or Delta-9-THC Inhalation Exposure Warnings (Environmental Exposures) – Content.
(a) A warning for environmental exposures to cannabis (marijuana) smoke or delta- 9-tetrahydrocannabinol (delta-9-THC), in ambient air in designated smoking, vaping, or dabbing areas meets the requirements of this subarticle if it is provided using the method required in Section 25607.46 and includes all the following elements:
(1) The symbol required in Section 25603(a)(1);
(2) The word “WARNING:” in all capital letters and bold print; and
(3) The words:
(A) In designated areas where cannabis smoking occurs, or both cannabis smoking and delta-9-THC vaping or dabbing occur, the words, “Breathing the air in this area exposes you to cannabis smoke, which increases your cancer risk and, during pregnancy, exposes your child to delta-9-THC and other chemicals that can affect your child’s birthweight, behavior, and learning ability. For more information go to www.P65Warnings.ca.gov/cannabis.”; or
(B) In designated areas where delta-9-THC vaping or dabbing occurs, but cannabis smoking does not, the words, “Breathing the air in this area during pregnancy exposes your child to delta-9-THC, which can affect your child’s behavior and learning ability. For information go to www.P65Warnings.ca.gov/cannabis.”, or
(C) In a designated area where delta-9-THC vaping or dabbing occurs, but cannabis smoking does not, and where consumers can be exposed to one or more listed carcinogens in ambient air, “Breathing the air in this area exposes you to carcinogens including [name one or more listed carcinogens] and during pregnancy exposes your child to delta-9-THC, which can affect your child’s behavior and learning ability. For more information go to www.P65Warnings.ca.gov/cannabis.” Where the product only exposes the consumer to one listed carcinogen, consistent with Section 25603(a)(2)(E), the business may use the phrase “the carcinogen” rather than “carcinogens including” in the warning.
Note: Authority cited: Section 25249.12, Health and Safety Code. Reference: Sections 25249.6 and 25249.11, Health and Safety Code.
It’s important to note that the Prop. 65 warning language for cannabis consumption lounges is different from the warning language required for designated non-cannabis smoking areas. Failure to provide required Proposition 65 warnings in consumption lounge areas can have significant consequences – as can failing to provide consumer product warnings for THC, cannabis smoke, or other “listed chemicals” that may be found in cannabis goods sold in California. You can read more about our past coverage of California’s Prop. 65 here.
Other jurisdictions may have different warning requirements for cannabis consumption lounges, so be sure to do your research. Consumption lounge operators should also consider posting include reminders about responsible consumption, clear statements prohibiting underage consumption, warnings about driving or operating machinery after consuming cannabis, reminders about the activation time for different types of cannabis products, any pertinent restrictions regarding what can and cannot be brought in or out of the lounge according to relevant law, and warnings regarding any allergens (if food is served or allowed in the lounge).
Insurance
Given the potential liability involved with operating a cannabis consumption lounge, operators of these facilities would be wise to hold an insurance policy that explicitly covers — or at minimum does not explicitly exclude — lounge activities and injuries caused by lounge patrons. A number of insurance providers currently offer such coverage.
As always, it’s important to review any insurance policy carefully for any language regarding compliance with federal cannabis laws, as such could effectively invalidate the policy with respect to consumption lounges (which are still illegal under U.S. federal law).
Compliance
Finally, operators of consumption lounges should ensure that they are in full compliance with all relevant local and state laws and regulations, in order to avoid disciplinary or other enforcement actions. Working with qualified, competent legal professionals will help to facilitate this.
P.S. — Check out this resource from California NORML if you’re interested in learning more about cannabis consumption lounges in California.
This information is provided as a public educational service and is not intended, nor should be construed, as legal advice. For specific questions regarding cannabis lounges in California, please contact the Law Offices of Omar Figueroa at 707-829-0215 or info@omarfigueroa.com to schedule a confidential consultation.