NJ Cannabis Regulators Greenlight Entertainment at Consumption Lounges
New Jersey Cannabis Regulatory Commission officials have clarified that future cannabis consumption lounges can host concerts, food trucks, and paid admission events, potentially transforming the state’s emerging social cannabis scene.
Speaking at the recent Benzinga cannabis industry conference in Somerset, NJ-CRC Chair Dianna Houenou provided key insights into regulations governing consumption spaces as the industry awaits the first approved lounges.
“We really want businesses to have the freedom to decide what kind of activities they want to have,” Houenou explained according to Heady NJ. “You can host events. You can make them paid admission if you want to. Businesses say they want to offer live music. That is totally fine.”
Navigating Regulatory Boundaries
While the cannabis consumption lounges will have operational flexibility, Houenou noted significant limitations imposed by the Cannabis Regulatory, Enforcement, Assistance, and Marketplace Modernization Act (CREAMMA). Most notably, lounges cannot directly sell food and beverages in a bar-and-grill model, though workarounds are available.
“You could let patrons order food delivered to the consumption. You can even host food trucks outside right where patrons can then purchase food orders,” Houenou clarified. This approach allows businesses to enhance the social experience while complying with current law.
A bill to allow direct food and beverage sales in consumption areas was approved by an Assembly committee in October 2024, but has since stalled in the legislative process. The food service restriction remains one of several regulatory hurdles for potential lounge operators.
Limited Municipal Acceptance
Despite the state creating a regulatory framework for consumption lounges, municipal resistance remains a significant barrier. Houenou revealed that only about a dozen of the more than 200 municipalities that permit cannabis businesses have explicitly allowed consumption spaces within their borders.
“Once they see these consumption areas are viable, they’re not harmful, they’re run safely and responsibly, I’m hopefully we’ll have more towns opening up,” Houenou said. The NJ-CRC reported that approximately 207 towns across New Jersey—representing just 37 percent of the state’s municipalities—have opted in to allowing cannabis businesses of any kind.
Benzinga reports that the conference, held at Delta Hotels by Marriott in Somerset, attracted operators, investors, and policymakers at a pivotal moment for New Jersey’s cannabis market, which now features 212 operational dispensaries according to the NJ-CRC.
#RECALL: Regulators said Hunterdon County-based cannabis cultivator Green Medicine NJ was ordered to immediately recall its Green Joy brand wholesale flower after testing determined it contained bugs and human hair. https://t.co/XYpmhJdUf6 pic.twitter.com/0K6mzYt3xS
— NJBIZ (@NJBIZ) July 31, 2024
Consumer Trends Emerging
A separate panel revealed insights into New Jersey cannabis consumer habits, with experts noting that purchasing decisions are primarily driven by “the 3 Ps”: price, proximity, and potency. Traditional cannabis flower remains the dominant product category, accounting for 43 percent of consumer sales.
“The New Jersey consumer is still not that educated,” explained Sarah Trent, CEO of Valley Wellness dispensary, noting that many consumers incorrectly “associate potency with quality” rather than considering the complete cannabinoid and terpene profile.
Panel moderator Amy Larson from Rx Green Technologies highlighted that many adult-use consumers are seeking products for pain relief and sleep assistance, effectively self-medicating without participating in the state’s medical cannabis program.
Industry Sustainability Concerns
Despite positive regulatory developments, speakers expressed significant concerns about the sustainability of New Jersey’s cannabis retail landscape. Trent offered a stark assessment, predicting that “a large percentage of retailers are going to fail” if the industry doesn’t support emerging manufacturers and cultivators.
The market continues to be dominated by multi-state operators who secured early advantages in the recreational market, making it difficult for smaller entrants to gain traction. “We have to give the new manufacturers and cultivators time to get off the ground,” Trent stated. “If we don’t support them, we will lose them.”
Looking Forward
As New Jersey’s cannabis industry evolves, consumption lounges represent a significant frontier for business innovation and normalization of cannabis use. However, their success will depend largely on municipal acceptance and potential legislative changes to ease operational restrictions.
The NJ-CRC continues to position New Jersey as a model for cannabis industry equity, with Houenou declaring, “We’re going to live up to this reputation as the Garden State.” She highlighted the state’s lower application fees and ongoing uncapped application process as factors making cannabis entrepreneurship more accessible compared to other markets.
Industry conferences like Benzinga’s event have become increasingly common in New Jersey, with MJ Unpacked, NECANN, and Real Cannabis Entrepreneur also scheduled for later this year, reflecting the state’s growing significance in the national cannabis landscape.
