Cannabis lifestyle

The state of cannabis consumption lounges in Canada: A Q&A with Nathan Mison of Diplomat Consulting

Jay Rosenthal
July 18, 2022

October 17, 2022 will mark four years of legal cannabis sales in Canada. But despite the progress that's been made so far, one ironic hurdle remains: creating dedicated "cannabis lounges" (also known as consumption lounges or smoking lounges) where individuals can safely and legally consume cannabis products in the company of their peers.

What are cannabis consumption lounges?

Cannabis consumption lounges are public spaces where consumers can purchase cannabis products to smoke, vape, and/or consume safely, onsite and in a social environment.

We sat down with Nathan Mison of Diplomat Consulting to talk about the state of Canadian cannabis consumption lounges (spoiler alert: there aren't any—yet!) and what the future holds.

On the importance of municipality outreach

"Everybody forgets about municipality. If you think about it, all of our businesses are actually in the cities or the townships that we live in. There's no zoning. So we really need to push a municipal outreach campaign for the creation of cannabis tourism and hospitality opportunities at a municipal level."

On combustion vs. ingestion

"The challenge is going to be combustion versus ingestion. All of the [negative] stereotypes are really tied to combustion. 'Too much smoke', 'it smells'—all of that is tied to combustion. I think ingestion through food and drink is where we'll see the greatest uptake."

On the popularity of edibles vs. smokeables

"Studies show that 65% of Canadians don't currently consume cannabis, but would be interested in trying edibles. I don't know about you, but if we're going to take that next giant step, bringing in 65% of Canadians... that's a big number.

On cannabis's place in tourism and hospitality

"When we talk about consumption lounges, we really need to frame it as tourism and hospitality. The timing is right—unfortunately, COVID destroyed the tourism and hospitality sector, turning a $105 billion economic contributor into a $50 billion economic contributor. That's pretty tough."

Full transcript

Jay Rosenthal [00:00:10] Nathan Mison! Thank you for making time. We wanted to let the Dutchie Universe know what's going on about cannabis lounges in Canada specifically, but before we get there, talk about who you are, what your company does, and your background. 

Nathan Mison [00:00:27] Yeah, thank you very much. Also a pleasure to see you, especially given this is the first time we're recording in this role. So it's nice to see your shiny new face. Congratulations to all that and all your success. I'm one of the founders of Fire & Flower, and left the company after about 34 months and started my own company called Diplomat Consulting. We're primarily a government relations, regulatory affairs, and public affairs company, and our slogan is regulatory foresight for economic opportunity. Those that write the rules and build businesses in advance of where the rules are going, seize the most amount of market share for the least amount of money, which is a great transition to cannabis lounges. And I'm also lucky enough to be the co-chair of the National Cannabis Working Group with the Canadian Chamber of Commerce, and the Co-chair of the International Cannabis Council with the International Chamber of Commerce, the OECD and the Canadian Chamber of Commerce. So [we're focused on] bringing Canadian cannabis to the world. 

Jay Rosenthal [00:01:28] And with all that, I don't think you sleep much. But but with that, one of the first and earliest times we spoke, I think it was in Toronto, was a year into legalization. You were bending my ear, but really anybody's ear about cannabis consumption lounges and what might be allowed, could be allowed, where it might go, what the timeline might be. We got some internal chatter going here at Dutchie about what is going on with cannabis lounges in Canada. Will it ever be a thing, what do the rules allow? Talk about all the things that you always talk about as it relates to cannabis lounges... will we ever get there, and what's possible?

Nathan Mison [00:02:09] Sooner rather than later. I think it's big. Momentum is starting to move. We've seen catering at a home base approved in Alberta, B.C. and Ontario, and I think that's a really good part to stop because this becomes the real problem of why cannabis consumption lounges can't roll out—everybody focuses on province and the federal government. Everybody forgets about the municipality. And if you think about it, all of our businesses are actually in the cities or the townships that we live in, and there's no zoning, or there's no business licenses. So we really need to work as the cannabis sector—and we're really excited at Diplomat that we'll be making an announcement soon about a new hire that will be leading a municipal practice for us where the first thing that we're going to push is a municipal outreach campaign for the creation of cannabis tourism and hospitality opportunities at a municipal level. And when we talk about consumption lounges, we really need to frame it in tourism and hospitality because the timing is really right to move this conversation for, you know, unfortunately, COVID really destroyed the tourism and hospitality sector. We saw it go from a $105 billion economic contributor to a $50 billion economic contributor. That's pretty tough. It's also the largest employer of the underemployed in Canada... 18 to 25 is primarily what we see in the hospitality sector. They're running at 14.8% unemployment right now. So government cares about this sector. We have a new federal minister of tourism who's working on this. And when we talk about consumption or cannabis tourism and wellness, we forget about spas, utilizing legal massage, our products that are right now bath bombs, essential oils in vapor lounges. But of course, then we talk about bars and restaurants where we can actually have cannabis in the drinking and edible form. And what's really exciting about that is 65% of Canadians that aren't consuming cannabis, the recent polling out of Abacus data was 66% of them want to try cannabis, but it's through ingestibles. Well, I don't know about you if if we're going to see that next giant step in cannabis, bringing in 65% of Canadians, that's a big number. So, you know, I think we have to start to make sure we tell government the opportunity, turn crises into great opportunity with the terribleness of the COVID and help Canada be one of the first federal jurisdictions in the world that could do cannabis tourism and hospitality... push that forward. I think we've seen momentum with that with live events and festivals approved in Alberta and Klein doing the first sampling event in the world last week in Ontario. It's coming. And it's coming in a significant way. 

Jay Rosenthal [00:05:12] And so what would need to happen, I guess, if I was a small town, let's say small town in Ontario? Cottage country. I wanted to have a consumption lounge. Like, aside from doing it just willy nilly, would I go to the my municipality, go to the province, say, 'I want to do this'? 'I want people to be able to bring in their own product and consume it?'

Nathan Mison [00:05:32] Yeah, there's even enough room underneath the provincial and federal rules right now. It's a little clunky, but there is enough room or room to do it right now where you could do infused cocktails in a bar environment or in Muskoka sitting on the beach, sitting on a patio, having a few cannabis drinks. And that's something as simple as restaurants and bars, comma, and cannabis, right? It's literally just the allowance of cannabis to be included in the same thing at a municipal level as alcohol. That's primarily what it is. We need to advocate for that. Same with sports. It's literally therapeutic uses of products, comma, and cannabis products, right? Like, it's not a big change, but it's a change that, you know, there's 700 municipalities in Ontario-ish, you know, that's a lot of coordination. So, you know, like you said, it's one step, one step, one step until we get big change. But let's pick a place like Muskoka and let's get that changed that it shows that, you know, cats aren't marrying dogs. Dogs aren't marrying cats. You know, it's you know, it's not Sodom and Gomorrah... it is something that normal people can do. And and we're not going to see car crashes in every community. And we just need somebody to show that leadership. 

Jay Rosenthal [00:06:54] Yeah. I also think it's worth noting that few places have more people consuming cannabis walking down the street than maybe downtown Toronto. Honestly, I mean, it's the people are consuming all the time anyway. How do we capture that or how do we make space for that? Probably not inside, I would guess, in terms of the smoking component of it in Ontario, but how do we actually make a space where it's okay or allowed or people can convene? You know, I'm thinking about like even at a concert at Budweiser stage, you know, they will let you have a smoking area, but not a cannabis smoking area. Like, people can bring in edibles but can't actually buy them there. 

Nathan Mison [00:07:35] It's crazy. And, you know, but we have seen movement. So like, Alberta, which you know, tends to be fairly conservative in its approach. Alberta did approve on March 8th of this year live events and festivals, including public consumption. We worked very hard on that initiative and we've seen the Folk Festival in Edmonton, which gets 35,000 people a day actually doing the cannabis gardens this year. A full consumption garden with education and brands there. That's a big step because other jurisdictions will look at Alberta because of its conservative, really tight way that it takes cannabis approach and utilization and see that again, this is an opportunity to roll that out. I do think that you did flag something that's really important, though. The challenge is going to be combustion versus ingestion. Right. All of the stereotypes that politicians and bureaucrats have is really tied to combustion. The NIMBYism of "too much smoke", and "it smells" and blah blah blah, is tied to consumption or combustion. I think ingestion through food and drink is where we'll see the greatest uptake and it's the softer starting points to get us to ingestion or to combustion. So I think there has to be a measured approach. And if you go in with, we need to smoke, you'll you'll find more apprehension to it. I think food and drink is a better place to start. And that's the approach that we've taken. And we're all waiting with bated breath in British Columbia because they'll have a what we heard report in the fall about consumption. And they really made that differentiation between combustion and adjustable. So it'll be interesting to see what their report says as well. 

Jay Rosenthal [00:09:22] Nathan Mison, always good to talk to you about this and anything really, but this one in particular I know you're quite passionate about. It's been something that's been on your—I was going to say plate and it has—but now what when it's talking about a consumption lounge and that's a whole different connotation and I can't wait for whatever will be the first proper cannabis consumption lounge. We'll be there with you and it'll be a great day, evening, couple of days... that would be a lovely, lovely scenario to check in with you. So, Nathan, thank you for your time. Thank you for sharing what you know and we'll connect with you when we connect with you. Nice to see you. 

Nathan Mison [00:09:55] Look forward to talking again soon.

About the author
Jay Rosenthal
Lead Content Producer @ Dutchie