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HIGHLIGHTS
  1. Toronto will host Canada’s first legal cannabis consumption lounge in June, though the organizer says the space is meant to raise awareness about the lack of legal framework for social cannabis consumption businesses
  2. From conducting on-site research to running members-only clubs, businesses have been finding creative ways to allow social cannabis consumption on their premises for decades
  3. Various jurisdictions in the United States with legal cannabis markets are starting to write rules for how cannabis can be consumed socially in bar-type settings and at special events

Weed is now legal in Canada, but establishments outside of private residences where adults can gather in groups to responsibly consume their recreational pot are not.

As The Globe’s Cannabis Professional was first to report Monday evening, the country’s first legal cannabis consumption longue is coming to the Toronto Craft Beer Festival in late June. However, the space itself is simply part of an existing smoking section where cannabis would already have been allowed and the organizer - Hotbox Cafe owner Abi Roach - acknowledges the longue is really an attempt to educate Canadians about the need to regulate social pot consumption in the same way bars and pubs are regulated for social alcohol consumption now that recreational cannabis is legal.

“Right now, if you cannot consume in your home because maybe you rent or maybe you have kids, and you don’t want to just stand out in the street, then where do you go?” said Ms. Roach, who previously allowed cannabis use at her Kensington Market-area cafe (vaping indoors and smoking on the outdoor patio) for decades until the federal Cannabis Act took effect last year. “Now I’m supposed to prefer to have you smoke your cannabis out on the street where children might be walking by, rather than offer a comfortable, safe space that is age-gated with ventilation and a medically-trained staff.”

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She is planning to re-open her patio for cannabis next month after working out a deal with local bylaw inspectors. Although Ms. Roach said that deal will require Hotbox to stop selling food and drinks.

“We cannot even have a water cooler on the premises,” Ms. Roach said.

Lacking any legal framework for the cannabis-equivalent of bars and pubs, businesses such as Hotbox have existed in a regulatory vacuum for years before legalization. Owners of those businesses have long been pushing for legitimacy and the end of cannabis prohibition is starting to force policymakers to pay attention.

“We are going to have to figure this out,” said Toronto City Councillor Mike Layton. “There is a huge equity argument here… half this city rents so what are people supposed to do, like my mom who lives in a condo?”

Little work has been done to begin drafting regulations for cannabis consumption spaces, Mr. Layton said, adding the issue is complicated by the lack of clarity over where the line between provincial and municipal authority to license such establishments actually lies. After a recent meeting with Ms. Roach, Mr. Layton said “I immediately walked back to my office and told my chief of staff we have to get on this.”

As the bureaucratic wheels begin to slowly turn, Jenna Valleriani notes social cannabis consumption “is happening already in an unregulated way.”

“Yet nothing really catastrophic has happened as a result of having these spaces,” said Ms. Valleriani, a postdoctoral fellow at the British Columbia Centre on Substance Use (BCCSU) whose research has focused on cannabis legalization. “I can still remember a few underground cafes from when I was a teenager.”

One of those businesses was the Kindred Cafe, near downtown Toronto’s Yonge and Wellesley intersection, until it was raided and shuttered in 2008. Built into a former private residence, Kindred operated a licensed coffee shop on the main level and required patrons to purchase a $5 daily membership to access the second level, where they could rent rooms equipped with expensive vaporizers by the hour, or the third-level rooftop smoking patio.

“Kindred was the blueprint for the future of what legal cannabis consumption could be,” said Lisa Campbell, CEO of Lifford Cannabis Solutions. “You could have vaping indoors, a licensed smoking area outside and edibles use inside as well.”

Regulations differ by province, though the Smoke Free Ontario Act prohibits all vaping and smoking in any private establishment, including on outdoor patios. Few exemptions to that provincial law exist, though cannabis-focused lawyer Caryma Sa’d said one of them applies to scientific research facilities.

That is the loophole through which another grey market Toronto consumption lounge, Vapor Central, currently operates. Customers are allowed to bring their own cannabis and make use of the on-site dab bar and Volcanos (a type of high-end vaporizer), but they must also agree to participate in a research survey with every visit.

“Some of the lounges have been trying to get creative,” said Ms. Sa’d. “But the current situation is problematic on a number of fronts… one option for the province to address this would be to create an exemption [in the Smoke Free Ontario Act] for businesses specifically designated for cannabis consumption.”

From a public policy perspective, legalizing social cannabis consumption businesses is arguably far more complicated than legalizing cannabis itself. Not only is the jurisdictional issue of local versus regional regulatory bodies unclear, but policymakers must also grapple with questions of proximity to children and potential employee exposure to harmful second-hand smoke in more detail than retail licensing requires.

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That, says BCCSU’s Ms. Valleriani, is part of the reason other places that legalized pot years before Canada are just now starting to write the rules for social consumption.

“When Colorado first legalized [in 2014], they had a ban on public consumption [as some provinces such as Quebec are considering] and they didn’t really think too much about what public or social consumption might look like,” Ms. Valleriani said. “They ended up having a massive increase in public consumption ticketing, which the data showed disproportionately ticketed Black and Hispanic consumers.”

Colorado lawmakers introduced House Bill 19-1230 just last week. If passed, the proposed state law “authorizes legal cannabis hospitality spaces” to be licensed separately from cannabis retail stores. Denver had previously allowed such spaces to exist via a pilot program, but only a handful of businesses were able to open as a result and most quickly shut down, with many citing the nebulous regulatory environment.

Oregon is considering similar legislation, with State Bill 639 getting introduced last month and promising to authorize cannabis lounges as well as temporary special event permits and specialized venue licensing. Alaska lawmakers are slightly further ahead, with state rules governing cannabis consumption lounges at existing retail stores - though consumption areas must adhere to strict separation and ventilation requirements - set to take effect in late April.

Even in Massachusetts, which is one of the more recent American states to legalize cannabis with voters approving the measure in 2016, the state’s Cannabis Control Commission launched hearings on how it should draft “social consumption business” regulations last week.

Canada, Ms. Valleriani said, would be wise to move quickly on its own rules if the government wants to succeed at pulling cannabis from the cultural shadows.

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“Providing more spaces where folks can consume what is a legally regulated substance would be setting a precedent that a lot of consumers would take advantage of in the future,” Ms. Valleriani said. “There is going to be a very big market for spaces like that.”

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