Not Your Average Consumption Lounge: Kaleafa Social Club

In the Oregon’s saturated cannabis market, the owners of the vertically integrated Kaleafa Cannabis Company believe two major factors help them stand out: variety and value. That’s because each of the company’s seven retail locations offers more than 2,000 SKUs at any given time. And, thanks to the company’s buyers often developing long-standing relationships with their vendors, Kaleafa can oftentimes purchase products in bulk at a lower price

“We’ve got a lot of great price points so we’re able to hit pretty much the whole market, but the quality you get within those price points is really the biggest differentiator,” says Owner and Chief Operating Officer John Widmer.

Widmer—who is co-owner, along with his wife, Julie, and brother, Bill Widmer—have carried the idea of offering the highest value possible through multiple segments of their business. Kaleafa opened a “cannabis outlet” within its Glisan, Ore., store, in September, which sells products that are slow to move at a significantly reduced price. And in July, the company opened Kaleafa Social Club, a membership-based consumption lounge, which allows members to consume cannabis safely amongst a wide variety of entertainment options.

The idea of the social club stemmed from Julie and Bill’s desire to celebrate the communal culture of cannabis, similar to how wine is celebrated. “You have wine clubs … you have vineyards you can go visit … but you can’t do that with weed, and that’s really discouraging to the cannabis community,” Julie says. “We’re trying to make that cannabis culture available to more people, so it’s not taboo. … I think that the cannabis community is calling for that and wants respect in that manner because we enjoy wine just like we enjoy cannabis.”

Kaleafa Social Club is located in an Oregon City strip mall, right next door to a Kaleafa dispensary. The 3,000-square-foot club is more akin to a Dave & Buster’s than your typical coffee-café cannabis lounge. This is what the Widmers believe add value to the social club’s offering. There are large-screen TVs with NFL Sunday Ticket packages, video game consoles, a shuffleboard table, a photobooth, ping-pong table, virtual reality, a pool table, and a stage for live entertainment. Members of the club can purchase CBD beverages, as well as rent dab rigs, and order food to the venue via UberEats and GrubHub.

Additionally, and unlike many typical consumption lounges with clouds of smoke, the Widmers installed air scrubbers attached to the ceiling to pull air out of the building and help keep smoke at bay. “I don’t want people to be afraid they’re going to come in and leave smelling horrible,” Julie says.

© Courtesy of Kaleafa Social Club

No cannabis is available for purchase at the social club (members must purchase at the dispensary next door or bring cannabis from home before arriving). Members (aged 21 and older) must pay a yearly fee of $25, as well as a $5 coverage charge each time they come to the club. If an entertainer is performing, the cover fee may be higher, Julie says.

Of course, the coronavirus pandemic threw a curveball into their plans, which had been in the works for nearly two years. Capacity is limited to 25 persons at any given time, members must wear masks anytime they’re not seated, and sofas are positioned 6 feet part facing different directions. Membership has been slow, the Widmers say: about 400 people belong to Kaleafa Social Club to date, and so keeping capacity low hasn’t been a real problem. 

Kaleafa Social Club’s team has been using a myriad of ways to get the word out to the community, including promotion “in-house” with their current dispensary following (such as literature in exit bags, notifications to their 80,000 loyalty program members, and videos that play on loop within the stores), as well as vendor days, says Tom Bacon, Kaleafa’s vice president of marketing. “The social club makes the perfect venue for our vendors to be able to bring some meals in, have a big-screen show go on, people can try a sample—which you normally can’t do in a dispensary. Now we’ve got a place where we can go,” Bacon says.

Live-streamed stage performances have also helped get the word out about the social club, Bacon says. “We use local artists. We actually had artists come down from Tacoma last week, and it’s hosted by a local radio host. … [The artist plays] four songs; we broadcast it livestream on Facebook and Instagram through the Roseland Theater…a big theater in town. … It’s a great outlet for artists to get on stage and do their craft again,” he adds.

Kaleafa has streamed their live events to up to 7,000 online users. Their shows so far have been hip-hop centered, and they plan to add other artists and music genres in time. “We have the venue that’s perfect for this: they can come in and smoke, they can do their sets, it’s good for the Roseland, it’s good for us, and good for the community,” Bacon says.

Kaleafa’s COO John says that in order to ensure the social club was compliant, the team ran the concept through their team of lawyers. Because the social club is a consumption lounge—not a dispensary—“it’s not regulated by any [cannabis-related] entity,” he says. “The [Oregon Liquor and Cannabis Control Commission] doesn’t acknowledge it … It’s really kind of a grey area.”

John says he makes sure that the club is following the rules by having a separate address for the club, not allowing members to go back and forth between the dispensary and the lounge, charging a membership fee, acquiring a business license, and working with the city to ensure Kaleafa Social Club is following the state’s Indoor Clean Air Act. Owner operators are the ones on duty at the social club, Julie says, which helps them work around having paid employees or volunteers to protect from inhalants (such as cannabinoids) under the ICAA.

© Kaleafa Social Club

“You’ve got to be extremely diligent on making sure that you know the rules centered around what it means to be a ‘club,’” John says.

So far, the Kaleafa team says they haven’t received any major pushback about opening up. A couple community members expressed concern about opening a social club in the era of coronavirus, Bacon says; however, they have not received any pushback about the club existing for the purposes of consuming cannabis.

In the meantime, the Kaleafa team is hopeful that they’ll see more consistency in memberships and attendance in the coming months.

While in other parts of the country, such as Palm Springs, Calif., public cannabis lounges have been shut down, the Kaleafa team is confident that they won’t be shut down due to increasing coronavirus cases because the social club is private and membership-based, unlike a restaurant or movie theater, for example.

“When COVID went down and we were deemed essential, [a dispensary] was one of the few places [people] could go outside their house,” Bacon says. “It kind of reminded me of [the TV show] Cheers; they were so excited to be able to come to the dispensary, and have that lifeline to see their budtenders, see their friends, remember their names. It’s going to be a long, crappy winter and there’s not going to be any place for them to go, so we expect to see that number [go] up as we’re ramping up efforts to bring members in.”