Marijuana cafes combine dispensaries and food service

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, Marijuana cafes combine dispensaries and food service

Los Angeles-based Lowell Herb Co. grabbed headlines in October by opening a cafe in California where customers can legally consume cannabis while taking in a meal or a cup of coffee.

Original Cannabis Cafe in West Hollywood is one of the first regulated locations in the United States where adults can openly consume cannabis in a restaurant-style atmosphere. Getting the green light for the concept, which blends cafe and dispensary, required the cajoling of California regulators and provided a framework for Lowell to duplicate the cannabis restaurant concept elsewhere—although the cannabis business and eatery parted ways in late 2019, when Lowell became embroiled in a legal dispute with California regulators.

Despite the breakup, the restaurant’s launch sheds light on how Lowell sought to expand its brand beyond California and into on-site consumption, an initiative that other cannabis companies are expected to join in the months and years ahead.

As part of its expansion effort, Lowell hosted a pop-up infused restaurant and consumption lounge in December, during MJBizCon in Las Vegas, dovetailing off the established West Hollywood eatery. The restaurant’s launch, meanwhile, brought Lowell headlines in national publications.

The idea of pairing a dining and cannabis experience isn’t new, to be sure. Some chefs, such as San Francisco’s Coreen Carroll and her husband, Ryan Bush, operate underground pop-ups that offer gourmet meals with infused products. Others, including Mason Jar Event Group in Colorado, host events where customers can consume marijuana while dining in a picturesque setting.

But state and local regulators have been hesitant to allow a full-scale restaurant or cafe space where customers can use marijuana on site.

“We are charting new territory from every angle,” David Elias, co-founder and CEO of Lowell Herb Co., said in November. “Our goal is to lead by example for the cannabis industry while creating the best experience for the community.”

Clearing regulatory hurdles

When it opened last fall, Original Cannabis Cafe was called Lowell Farms: A Cannabis Cafe. The establishment launched with Lowell Herb Co. as a main partner, but that partnership ended Dec. 1, when the cafe relaunched as Original Cannabis Cafe, independent from Lowell Herb Co.

The public split came just before the California Department of Agriculture filed a lawsuit against Lowell Herb Co. alleging the business didn’t have a valid license while producing cannabis products in March 2019.

“For business reasons, our Cannabis Cafe launched with a corporate sponsor, but now we are excited to focus on our goal of presenting our diners with as diverse a range as possible of cannabis from small, independent growers and entrepreneurs,” said Andrea Drummer, the eatery’s executive chef and partner.

The restaurant has roots dating to 2017. In fall of that year, West Hollywood officials cleared the way for cannabis consumption site licenses. Cannabis industry experts provided feedback on an ordinance that allowed a total of eight establishments where smoking, vaping and edibles would be allowed.

During the November interview, Elias said city regulators “worked with the county and state on legal matters” to help clear the zoning and licensing hurdles faced by others trying to open social consumption sites. In Denver, for instance, social consumption venues cannot sell marijuana products. Smoking marijuana inside also proves to be problematic in many places because of state laws governing clean indoor air.

West Hollywood hasn’t waded into the uncharted territory of regulating dual consumption: Cannabis Cafe customers cannot use alcohol or tobacco on site. But the cafe can offer customers marijuana flower, pre-rolls, edibles and concentrates. Bongs and vaporizers also are available for customers to use.

“Our lobbying efforts for the city started over two years ago,” Elias said. “We’re excited about taking one step closer toward the end of cannabis prohibition, and we envision a world where cannabis consumption … becomes more prevalent and accepted in society.”

Building the right crew

The team behind Lowell Herb Co. did not have a background in the restaurant industry. Since 2017, the company established itself as one of the top pre-roll sellers in California; Lowell products are sold in 350 stores.

To head up the cafe concept, Lowell brought on Drummer as executive chef. Drummer trained at Le Cordon Bleu College of Culinary Arts in Pasadena, California, and has built a reputation as a cannabis chef since 2012.

At Cannabis Cafe, Drummer doesn’t infuse the food she’s preparing with marijuana, but the vegan nachos, pulled pork sandwich and other menu items are designed to pair well with cannabis.

Drummer and Lowell partnered with Mark and Jonnie Houston to help with the vibe of the cafe. The twin brothers run Houston Hospitality, which operates high-end, nightlife hot spots in Los Angeles.

The cafe’s aim was to create a welcoming space for both cannabis connoisseurs and the canna-curious. The cafe has 710 concentrates on the menu and GPen Connects available for dabbing. “Flower Hosts” are on staff for consumers who want to learn more about cannabis and what products might be right for them.

“The team hired a staff that’s passionate about being part of the first cannabis restaurant in America,” Elias said. “We have talented flower and food servers who are experienced in their respective backgrounds.”

Diversifying the brand

Before its legal difficulties, the Lowell Herb Co. name had gained traction in California. Elias envisioned moving the company from a regional to national—or possibly international—brand.

Launching the cafe concept helped that effort, with major outlets such as The New York Times, Forbes and Vogue sharing the news about the “first cannabis restaurant” and the team behind the concept.

Lowell announced a funding round last August with support from celebrity investors Miley Cyrus, Chris Rock and Sarah Silverman. The company said it was launching new products and gearing up for its national expansion plans for 2020. In December, the company announced plans to expand to Nevada.

Elias declined to share any financials. But an Oct. 3 filing to the U.S. Securities and Exchange Commission for Lowell’s parent, The Hacienda, shows $22 million raised as part of a $26 million funding round. The minimum investment accepted from any outside investor was listed as $10 million.

Looking ahead, it’s unclear what the future will bring for Lowell Herb Co. But the company’s groundbreaking efforts to launch a cannabis cafe could serve as a template for other businesses looking to get into the on-site consumption space. Moreover, Lowell hasn’t abandoned the concept.

“It is definitely part of our strategy to explore innovative ways to connect with our customers,” Lacey Trejo, a public-relations specialist wrote in an email on behalf of Lowell. “We are currently looking into new markets that would be a fit for our innovative cafe concept.”