How To Open a Vapor Lounge

CANNABIS CULTURE - Learn the basics of opening a Volcano vapor lounge. You can run the hippest joint in town!

[CC Editor's note: This article is an updated and revamped-for-2012 version of "How to Open a Cannabis Cafe" from CC #58.]

If you've dreamed of having an Amsterdam-like cafe in your hometown, it's not impossible. Of course, you won't be selling pot; that's not going to fly in Vancouver, Toronto or anywhere else in 2012 at anything other than a med-pot club (see "How To Open A Compassion Club", CC #57), but you can accommodate pot smokers by providing a sanctuary for them, one that is both self-sustaining and spiritually satisfying.

Your vapor lounge is the front line in our cultural revolution! It's not important to sell the marijuana. Your vapor lounge is where our cannabis community comes to be together, to be who they really are, in unity and enlightenment. You will be the local center for the cannabis culture. You can make your dreams of commercial success and personal reward come alive, and quickly become the 'voice' of the cannabis community in your area.

The pot-puffing lounge not only ensures enthusiasts have a fun and amazing time, but it keeps the cash register ringing. To be successful, and to keep the doors open, a well-developed income stream is critical. Again, grass sales are strictly prohibited unless you're opening a med-pot store, but this how-to is about a glorified, pays-its-own-way pothead hang out!

Vapor lounges have become weeds that police and politicians find increasingly difficult to yank. Enforcement priorities or lack of manpower allow these toke-friendly places to operate in major Canadian metropolitan centers, and med-pot friendly US states, mostly unmolested.

Readers who feel their smaller or conservative community also deserves a place where cannabis enthusiasts can peaceful imbibe the herb should anticipate plenty of body blows, and a few head shots if they choose to set up shop.

Marc Emery, referred to by his devoted fans as the Prince of Pot, states in the YouTube documentary entitled "YONGESTERDAM the movie":

You need a community that's typically urban to get away with this kind of overt smoking – like here I am smoking and everyone smokes here – well if you do that even in Montreal you would get shut down, but if you do that in Vancouver, you're okay; in Toronto, you're okay. But there is almost nowhere else in Canada where you are 'okay' to do that (YouTube).

Potheads in Thunder Bay, Canada or in Brisbane, Australia, or even Chicago, USA deserve to have a liberating Vansterdam/Yongesterdam-like ganja experience. But you have to be realistic about the local 'climate' as you arrange your business plan.

Chris 'Goodster' Goodwin claims a wise capitalist can do the math and add up how much it costs to open a vapor lounge, but wonders if he will stay open after the first cops come in and say, "this is illegal, and we will be back to arrest". Are you up for it?

Many people ask lounge operators, "how do you get away with this?" or "what loophole do you use?" But the answer is we aren't getting away with anything. We don't use any loophole. "Why don't they bust you?" Well, sometimes they do...

The simple answer to how these vapor lounges exist, is the willingness of the owner and staff to open for business everyday. Goodwin learned it's best to tell any police that enter his full name, birth date, that he is solely responsible for all the cannabis in the lounge, and will comply with every reasonable request.

In the begining, some of the first vaporizer cafes were raided and shut down, like the Herbal Tea Café, Marc Emery's Cannabis Café and Hemp BC, Da Kine, Kindred Café, and the Up In Smoke Café. So how do these NEW Vapor Lounges stay open?

In 2003, Chris Goodwin opened Hamilton Ontario's Up In Smoke Cafe in a working class, social democratic stronghold (with both the provincial and federal seats held by the New Democratic Party, Canada's left-wing representatives) in a town with a population of a half-million. He counted over 200 police visits and 35 patron arrests in his two years in business. Hamilton liked the Up In Smoke Cafe; at least, the local populace did.

Goodwin began limiting arrests dramatically with his members-only vapor lounge concept, a lesson learned after at first allowing smoking throughout the entire facility. Long-time pot activist Marc Emery first questioned the profitablility of placing a few couches in a room with a vaporizer on a coffee table, as stoners may hang out all day, limiting sales. But Goodwin saw too many of his regulars get popped when police would come in. Punishment for first-timers is usually a fine and a criminal record, but repeated arrests make a place a heat score, not a chill-out space.

Still, Up In Smoke Cafe was the hottest, most happening, and busiest lounge in Ontario, combining radical retail with in-your-face cannabis activism. Goodwin himself has been charged many times, and raided a few, but was determined to beat those charges with good legal representation.

Sales were brisk, and the Up In Smoke Cafe saga started a buzz that couldn't be stopped even after three raids by police, though the location closed in 2006 with Goodwin spending six months in jail. Up In Smoke was a wonderful two year experiment in aggressive retail activism. Goodwin and his Hashmob were able to provide the rest of us with some excellent lessons on what can work and what tactic has drawbacks.

Goodwin also helped Peter Melanson open Melanheadz Vapor Lounge on Hamilton mountain, and the BCMP Vapor Lounge opened for business around the same time. The benifit of the membership-based lounge was clearly safer.

The Vapor Lounge did not just arrive out of nowhere; it was a result of a series of charismatic events that have normalized their activities.

Their legitimacy revolves around the idea of pot as a philosophy, in which Marc Emery states "Pot is the only multiracial, completely tolerant philosophy in the world; most people don't understand the benefit" (YouTube).

There is nothing more powerful than an idea whose time has come, said Victor Hugo, and Goodwin, with the help of Dom Cramer, re-opened Up In Smoke Cafe as Vapor Central in Toronto's Yongesterdam district. Goodwin and his crew continue to be some of the most visible and uncompromising cannabis legalization activists in Ontario.

Wait a minute. Isn't pot illegal?

Yes, but cannabis is Goodwin's life. It's his passion. It's his reason for being on this earth. It's his calling. As a protégé of Libertarian activist, Marc Emery, Goodwin was mentored for 10 years to use the direct action tactics of peaceful open civil disobedience to repeal what he calls "unjust cannabis laws" and the vapor lounge is on the front lines. The vapor lounges exist thanks to unrelenting activists like Goodwin and Emery.

12 Steps To Opening A Vapor Lounge In 2012

  • Developing An Income Stream
  • Opening Operating Budget
  • Landlords & Location
  • Bylaws, Inspectors & Inspections, Neighbors & Legal
  • Insurance & Lawyers
  • Lounge & Retailing 411
  • Putting Food on the Menu
  • Competition? Yes.
  • Free Advertising & Promotion
  • Membership Has Its Privileges – Yes Pothead, There Are Rules
  • Pot Partners
  • The Small Business Sacrifice & NEW TIPS

Developing An Income Stream

Until the repeal of prohibition, the toke-friendly joint needs to earn all its income from non-grass sales. As the owner you're only providing a liberating spot to engage in intelligent conversation, which sometimes includes remarks such as 'Don't bogart that joint,' or 'Here, try this Afghani hash.'

But you need to earn dosh to provide the hangout. Munchies make money. However, the restaurant industry has an incredibly high belly-up rate. Basically the only difference between your lounge and a cafe is the target market. One proprietor is seeking those who like marijuana; and the other, food.

Bongs, rolling papers, cool pipes, and cannabis book sales are obvious choices to keep revenue flowing from your target market, potheads. Vapor lounges charge $5 at the door, which includes the use of a Volcano Vaporizer. Bong Rentals can range from $2 to $12 for Red Eye, Gear, Hoss and RooR.

Cafe cannabusinesses like the Hot Box Cafe (Toronto), Up In Smoke Cafe (Hamilton), and The Amsterdam Cafe (Vancouver) are a combination of retail ganja goods and cafe services (food and drink in a cannabis-friendly environment). Pot patrons have to buy something before toking, even if it's just a tasty beverage.

Opening Operating Budget

A fiscally frugal person can get a place up and running for around $10,000 – $20,000 in a small to medium size city.

Reasonable rent is critical; pay attention to any add-ons such as property tax, business tax, property management, and utilities. Reasonable rent is determined by foot traffic in front of that business, store visibility to commuters in cars and buses, condition of the premises, whether it's zoned for cafe/retail/restaurant already, and what amenities (like plumbing, kitchen, air conditioning) are included.

Renovations usually cost double plus take twice as long as you estimate, meaning if you need to renovate, everything costs more than you planned and takes longer to do than you thought! Be careful: expensive renovations can blow budgets and sink you before you even get launched.

Couches, TV's, Volcano Vaporizers, glass bongs all add up, but all make money. Glass should always be clean and ready for rent or purchase.

A starter vapor lounge could easily do it with 5 volcanos, 5 bongs, 5 couches, 5 tables with 20 chairs, seating for 30-50, a fridge, a stereo, and a few TVs. Anticipate working alone with volunteers or laborers paid daily. Sales should be $250-$300 a day to start. Expenses should include a good large sign out front.

Think in terms of growth, after you rent out the vapes and bongs you started with a few hundred times, add more as you need them.

From this moment forward, take a good hard look at how every vapor lounge works. Look at how these places use space efficiently. Pick the brains of owners and staff by learning from them. They have made the mistakes and learned from them, and now you see their most efficient marketing layout for their store. Study every vapor lounge you visit.

Search second-hand shops for decor that provides an authentic eclectic vibe. The decor dovetails into your world-view on what a cool pot hangout/refuge would look like. There are always cool historical cannabis artifacts available on eBay, as well as posters, handbills, and other cannaphernalia. Cheap and effective wallpaper can be made from High Times and Cannabis Culture centerfolds. You can't go wrong there. When providing reading material, make sure customers have to buy the latest magazines or books. Free things lying around tend to get taken.

Landlords and Location

Unless you have $1 Million to buy your own building, you will have to lease or rent. The great thing is, with honesty you will find, after being rejected once or twice, an old hippy activist that owns a property and will enjoy re-living his revolutionary 60's past vicariously through your vapor lounge endeavors (or another friendly scenario).

First-floor store fronts are more exposed to scrutiny, and more expensive. With most modern vapor lounges, there is a small reception area in the front, with customers going past a wall , door or front desk to access the vapor lounge.

Second-floor locations, normally avoided for retail stores, can be the safest alternative, and half the rent. With toking tourism, sometimes you want to be just off the beaten path, a slightly sly way to be successful without any complaints.

Bylaws, Inspections, Neighbors and Legal

Nail down every permit before installing a kitchen and creating the environment. That experience alone may discourage a kitchen installation!

Applying for permits at city hall is simple, but every inspector that city hall can throw at your cannabusiness building, food, fire, police is going to bring their clipboard down. Anticipate serious nickel and dimeing on all the little things.

Don't be hostile. Stay positive. Ask questions. Ensure the handy fellows doing the construction work at the Opening Soon site understand the building bylaws. There's nothing worse than ripping out completed work because it's not up to code.

Read bylaws relating to your cannabusiness. Always open in a place zoned "retail" or "cafe" (both should permit a retail component, but will only allow you seating). "Restaurant" zoned space is good.

Cities across Canada are passing bylaws banning indoor tobacco smoke. Goodwin says these laws don't affect vapor lounges in Ontario. "It's only for tobacco, not marijuana; but there could be something about having ashtrays on the table, which is why we use heat resistant bowls." In Vancouver, where smoking substances of all kinds (including "herbs") is banned inside public places, vapor lounges still get a pass because they are vapor lounges, not smoking lounges.

Meet and greet all the surrounding business owners after you've signed the lease and are renovating, repairing, and getting ready to open. Explain how big the tourist market is, dispel myths about marijuana, and tell them to anticipate increased customer volume in the entire area. Be excited, but be receptive to their concerns, and be as level-headed with them as you can be. No over-the-top behavior or remarks. In fact, you should network deals with them, for your customers.

For Goodwin, this has meant local restaurants cut a deal to anyone who says, "I'm taking this back to the vapor lounge." Says Goodwin of surrounding businesses: "I tell the guys with empty patios that they'd be full if they'd just let people toke." Similarly, out-of-town ganja guests, when making purchases in the nearby downtown stores, should inform sales staff that they came to their city to check out the local vapor lounge.

By demonstrating Vapor Central has a financial impact on other business, the dollars will begin to outweigh the perceived problems.

Insurance and Lawyers

Again, unless you have a million in the bank, you will need insurance. Assessing risk is their business, and vapor lounges are very risky ventures to say the least. So expect some higher rates.

You need to limit your liability, and if the worst case scenario happens, theft or fire, you must be protected. Look for new marijuana insuance companies, and get more than one estimate.

No landlord will lease his million-dollar building to you without appropriate insurance.

Indeed, Vapor Central attempts to construct continuity with the past in which marijuana use was legal. But prohibition is still here, and a good lawyer on retainer is always a good investment.

Your Vapor Lounge may operate on whichever level it pleases. How may it maintain itself? It is clear that while VC is effectively enacting their own utopia, and rules, they stay within certain lines of the law, and the surrounding community tolerates this.

Vapor Lounge and Retailing 411

Goodwin is blunt about where he makes his income. 500+ customers a day puts paper in the register, but it didn't start out like that. You have to work hard. Live nightly events. Constant upgrades. Members feel like they pay to have a better pot palace.

Goodwin's correct in stating "You need the combo: head shop, toking room, food, munchies, hang-out, cultural centre."

In Toronto, Vapor Central is known for its comedy shows and an open stage. The BCMP vapor lounge in Vancouver also has an open mic night. Regular events and entertainment makes people want to come back. It's affordable, safe and comfortable.

Unlike at a bar, where people tend to get a notch louder and rowdier with each drink, crowds at vapor lounges get mellower, friendlier and more good-natured after each toke.

Putting Food On The Menu

With food, the best thing is to have it delivered pre-prepared. Selling sandwiches can require an expensive capital cost outlay. Baked goods, cakes, and munchies are best prepared in sanitary conditions off-premises and delivered daily (or whenever) to your store.

Ask around and you'll find bakeries, existing sandwich shops, and others in the business of prepared food that will be glad to sell you wholesale. Stock rotation is also important for foods with 'best before' dates. Remember: with food, bongs, and vaporizer parts, it's all about hygiene and consistent standards of cleanliness. Resin in the vape or bowl doesn't rent very well, and mold on a brownie doesn't sell very well or taste very good.

It pays to shop around. Do plenty of research. Just because it's at a wholesaler, or even a place like Costco, doesn't mean it's not cheaper somewhere else.

Obviously, as a marijuana vapor lounge, you might want to offer THC baked goods. This can easily bring in sales, and it's not quite like selling bud. In Canada, pot food is a hard case to prove in court, and since Watermelon was acquitted for selling pot food, it's a wedge a cafe can more safely take opportunities with. But The Kindred Cafe in Toronto was raided and eventually closed for selling pot food and a cannabis bakery was raided in Victoria, B.C., so this recommendation comes with warnings of extra police scrutiny.

Creating a well-rounded affordable munchies menu ensures a pothead can buy grass off his dealer and still afford to hang out at your lounge, a place where like-minded people can meet and eat.

Within a month, it's possible to convince 100 potheads a day to drop $5 – $20 to toke and eat with their bud buddies someplace other than their living room, creating a guaranteed weekly gross of two grand. Respectable reefer revenue!

Competition? Yes.

All right, so there's no cannabusiness in your town. Think you can open the doors, and resident characters like Norm from Cheers, or a Pot Poet like Chris Lawson, will instantly take up residence? Not so. The fuzz fear factor plays a role. This can be limited via a pot promotional program geared to your cannabis community.

With a vapor lounge, the enthusiast buys their green, then treks to the joint with a few friends, where the pot posse spend two hours in the afternoon ringing up a $25-$40 bill. Pricing, product, and pot all play a critical role in people spending their money.

Goodwin now competes with Toronto's other vapor lounges that want marijuana market share too, with their vaporizers, bongs, papers and pipes. Vape on the Lake, Vapor Social, Village Vapor Lounge, et al, have all emulated the vapor lounge concept, $5 membership, bong rentals, entertainment, all indoors.

In developing your business plan, on three different days of the week, spend several hours outside of a cannabusiness you admire probably not in your community and watch the frequency of people going in. Add a column for comments. Repeat.

Know thy competitors. Know their pricing. Know their gimmicks. When do they have sales? How do they advertise? Who are their wholesalers?

Finally, spend hours in the neighborhood you're thinking of renting in. Possibly it's near a competitor. Are you located around a college or university campus? Who's already visiting the local businesses? Will people come to the area? If so, what's parking like? Is there local transit? Determine via the research and a written plan how your cannabusiness has the winning formula to succeed, then market it.

Free Publicity and Promotion

A growing number of people regularly trek from within an hour (Niagara, Oakville, Brantford) distance of Vapor Central to spend a few hours in a mind bending liberating environment, watch a comedy show, and have a good time.

Goodwin says people from the USA, Detroit and Buffalo, make the trek of about eight hours to shop and smoke in his place. Many customers rent hotel rooms and spend the weekend. Customers enjoy knowing that some of the money they spend is rolled back into community activism efforts.

Goodwin has furthered the marijuana debate while generating publicity for Vapor Central. He receives reams of newspaper paragraphs, television time and talk radio based on his knowledge and his local business when he opened those locations in 2004 and 2007. Both started with huge 420 smoke outs, at City Hall and Yonge and Dundas Square

Goodwin's marketing campaign capitalizes on his direct involvement in the community. This results in media mentions, which are the best advertising and worth more than he or his competitors could afford to buy.

Even negative media can generate opportunity, if you stay calm in the spotlight. Goodwin, before his grand opening, publicly declared he'd sell marijuana, which led to a month-long media juggernaut. He made outrageous bold claims, and then appeared to give The Man a little by backing down to an original goal.

Goodwin says that had he publicly declared Up In Smoke Cafe just a toking cafe, then the police would have stepped back from there, and pushed us to medical or vapor only, although maybe it antagonized them into harassment mode. 200-plus police visits is a little much!

The police, media and politicians believed they had shown him the error of his ways, when the reality is that a toking-only lounge is fine with him for now. Recently he combined the cannaversary with a protest, creating a double-edged advertising campaign.

Until paid teams took over, Goodwin personally plastered posters all over Hamilton, Toronto and Niagara Region, promoting and sponsoring rallies. Coverage cracked National media with talk radio, and TV news running ongoing blurbs on their National Headline channel about the Goodwin Ganja Giveaways.

Vapor Central employed a slightly more low-key opening than Up In Smoke Cafe, which Goodwin boyishly smiles and admits is the easier way to go about business, but can still build a strong customer base quickly.

Membership Has Its Privileges Pothead Rules

How does Vapor Central maintain its legitimacy as a community within a socio-cultural context that legally disallows its existence? Make the Pothead lounge only accessible to members. Prospective proprietors could go so far as creating a gym membership type system. Memberships can be bought for a day pass, a month pass, or a year pass. This toke lounge room is off limits to non-members, particularly those sporting badges, tazers and guns. Employees must enforce! Turning away minors is key.

Roll all this membership money back into the shop. Revoke membership if potheads abuse the rules. "The biggest rule is no dealing, fishing, mooching, asking, and begging to get a toke off someone," Goodwin says. "Sometimes these moochers are blatant. Others are subtle. Worst are the people fishing in ashtrays. I'll throw you out on your head for that."

Goodwin lays down the top vapor lounge rule. "Don't come in here asking, 'Can I buy a dime bag?' We don't sell. No one sells. But I still get asked a 100 times a day."

Pot Partners

Best friends entering a business arrangement, or working for you, can easily destroy both the friendship and the startup. Write everything down, or if need be, draw up contracts. Spell out how the business is to be run, and when the money comes in, how to pay each other.

Making no money for a year or operating a failing business can ruin a friendship more fiercely than stealing or cheating with someone's spouse or significant other. Goodwin did open with a partner, Ryan Clark, now Goodwin has partnered with Dom Cramer, both are avid activists that still find handling the cannabis craziness that can unfold at any marijuana moment daunting.

Employee responsibilities need to be written out and adhered too. Vapor Staff consider Free Marc Emery T-shirts their work clothing like a McUniform, but actually cool.

The Small Business Sacrifice

Chris would live in a vapor lounge. He admits it. He has done it. His business is part of his family life. The amazing liberating experience of opening a cannabusiness comes with worry of am "I going to financially take care of the family." Goodster is totally dependent on his ability to generate income with Vapor Central. "In the first month you should be doing $100-$200 days with a vapor lounge, then $500 days by six months. I was doing that by then. And within a year I had days of $1000."

Like the cannabis plant, new businesses take time to grow. They need passion, nurturing, care, planning and dedication to succeed. Vapor Central almost consumes Chris Goodwin.

One day during a conversation with a Hamilton cop who came in, Goodwin proudly asserted that he and his ex-wife Melissa smoke joints all day. The next day, Hamilton Children's Aid came to the Goodwin home to see if the couple were "responsible parents." The CAS worker boldly asserted that two adults smoking marijuana became unfit parents, and could lose the custody of their child!

Any good activist knows The Man will do everything they can to derail the sacred movement of the cannabis people, including threatening families and mothers and children with segregation.

Goodwin responded with a press release and followed that up by radio, TV, and newspaper interviews. No retreat, no surrender. Their cause is righteous, and they won that round, with bravery. Prohibitionists are ever vigilant in advancing spiritual and physical control of the citizenry, especially those practicing a peaceful and honest lifestyle that opposes the State.

While photographs are snapped outside the now-landmark Up In Smoke Cafe, a tired Goodwin (sporting a few days facial growth) with a glint in his tired red eyes, sends the message combined with his laugh, "I love this."

New Tips

Both Vapor Central and Up In Smoke Cafe started with a old cash box, then a casio cash register, a few vaporizers and couches, with a couple tables and chairs with seating for 30, just a few bongs and pipes, many from home or friends, old big screen TVs, anything reasonable for fair prices to start. For events, it all starts with one mic and a small mixer, house speakers and an old amp, most for $50 or less and a stage that was plywood on milk crates.

Now, and with time, VC has grown to have two touch-screen cash registers, 25 Volcano Vaporizers, 25 leather couches, and seating for over 175, with 100 Glass rentals, and 7 flat screen TVs. Our events now sport 5 mics, with stands, a 26 channel mixer, 8 powered speakers, and a bigger cooler stage. Grow with the support you have. Expand walls as you need to. Take away cabinets that don't sell enough product, to add seating when needed.

Vapor Central Statistics

- 500+ Average Members a Day
- From 2007 to 2011 Over 250,000 Members with 45,000 At Events, Totaling $2.5Million in Sales.
- In 2011 Over 100,000 Members with 15,000 At Events, Totaling Over $700,000 in Sales.
- In 2011 Over 90,000 Daily Members, Totaling Over $425,000
- Over 10,000 Weekly, Monthly, Yearly Memberships, Totaling Over $25,000

ALL Sales
2007 $148,000
2008 $382,000
2009 $594,000
2010 $705,000
2011 $910,000
Total $2,739,000

2012.... $1 MILLION +

Memberships: 260,000 members = $1,232,000
Events: 40,000 members = $175,000

VAPOUR CENTRAL OFFICIAL RULES

WELCOME TO VAPOR CENTRAL WE ARE A BRING YOUR OWN BUD CANNABIS FRIENDLY LOUNGE.

YOU CAN VAPORIZE OR SMOKE CANNABIS, HASH, OIL, ETC. IN A SAFE ENVIRONMENT. YOU MUST BE AT LEAST 18 YEARS OLD. WE LOOK FOR FAKE ID'S.

NO DEALING, ASKING, FISHING OR MOOCHING. NO TOBACCO OR ALCOHOL.

$5 DAILY, $12 WEEKLY. $25 MONTHLY OR $95 YEARLY MEMBERSHIPS ARE REQUIRED AT THE DOOR.

Works Cited

"About". www.hashmob.com n.d. Web. 01 March 2012. http://hashmob.ca/about/
Assistant Manager: Vapor Central. Personal Interview. 21 November 2011.

"Backgrounder Mandatory Prison Sentences for Serious Drug Crimes." Justice.gc.ca.
Department of Justice. Web. 4 September 2009.
http://www.justice.gc.ca/eng/news-nouv/nr-cp/2009/doc_32339.html

History." Yongesterdam.com. Yongesterdam, n.d. Web. 15 Nov 2011.
http://www.yongesterdam.com/History.html

"Indepth: Marijuana Statistics." Cbc.ca. CBC News Online. 25 November 2004.
Web. 21 Nov. 2011.
http://www.cbc.ca/news/background/marijuana/statistics.html

"Marijuana Review Marc Emery Live at Vapor Central." www.torontohemp.com. 23 July
2009. Web. 25 November 2011.
http://www.torontohemp.com/phpBB3/viewtopic.php?f=35&t=2821

"Why is Marijauna Illegal?" drugwarrant.com. 2011. Web. 26 November 2011.
http://www.drugwarrant.com/articles/why-is-marijuana-illegal/

"YONGESTERDAM the movie." Youtube.com. 17 December 2007. Web. 20
November2011.
http://www.youtube.com/watch?v=Gj8K9JvCn9U&feature=player_embedded#!

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