Colfax Cannabis Lounge Wants to Add Micro Sales, Eyes January Opening

Cirrus Social Club has yet to come together after initially receiving approval from the city earlier this year, and the dry spell in Denver's cannabis space continues — while consumers have never been thirstier.

Despite being the first state to legalize the plant for recreational use in late 2012, Colorado still hasn't effectively established a licensed hospitality sector for cannabis. Social consumption licenses for businesses interested in allowing cannabis use weren't created at the state level until 2019, and Denver is currently home to just one open pot lounge, which only allows vaping and opened under a previous set of local rules.

Cirrus was one of four establishments approved for indoor use by the city since 2022, but all of them are still working to pass various building inspections. As the majority of these businesses pivot to outdoor smoking because of expensive ventilation requirements, Cirrus founder Arend Richard has doubled down on his mission of creating an intimate indoor cannabis lounge, smoking included.

"It's been fourteen months, and I could not be more excited to get the doors open," he says.

Cirrus is making progress with renderings and licensing qualifications, but there are still some challenges ahead, according to Richard. After Silicon Valley Bank fell earlier this year, one of Cirrus's key backers had to pull out funding, leading Richard and company to seek more investors. The cannabis club has also abandoned the bring-your-own model, and is now pursuing a micro-sales permit that would require Cirrus visitors to purchase and consume all cannabis onsite, similar to a bar.

Richard still plans to open by January of next year, but that could depend on the investors he gathers and how Cirrus's public hearing for micro sales goes with the City of Denver on October 13. In the meantime, we caught up with Richard to learn more about Cirrus's progress and how he envisions the final product.

Westword: Trying to create and open a new cannabis consumption lounge must be hard, given the lack of examples to follow. What has been most challenging so far?

Arend Richard: We had an angel investor who was in for the amount for the whole project, but when SVB [Silicone Valley] Bank crashed in May, he lost a lot of money. He told us we needed to get more investors. If Denver had moved quicker, we could have gotten started with construction earlier in the year, when we were ready. Then we could have opened with that money, which certainly would have helped. We're hopeful now that our plans are approved, and once our license is good to go, it won't take long for Denver to approve us to open.

We've heard other prospective cannabis lounge operators complain about the ventilation requirements for indoor smoking after their initial license approval, leading some of them to abandon indoor smoking for an outdoor patio. Have these HVAC requirements impacted Cirrus?

Yes. I mean, you don't expect when you're going into this that the HVAC will cost a half-million dollars, but ours does. Ultimately, I'm okay with it, because the end goal for Cirrus is creating a place my grandma would want to go to and have a good time at. She wouldn't want to walk into a smoke-filled place, so I'm more than happy to do it with Cirrus. We want nice, breathable air, so it will be like Las Vegas casino air, if not better.

But do you need $500,000 to do that?

There was always going to be a level of ventilation, but having to adhere to an International Mechanical Code and that rate of exchange — which is for the equivalent of a room full of people smoking cigarettes — is challenging. That's not the level of consumption we'll have in Cirrus, so it was a bit more than we thought it would be, for sure — but it's a bullet I've bitten because I want to get the doors open, and I want clean air for our guests.

Is the concept for Cirrus still the same?

I don't think it has changed too much. We're at the intersection of hospitality and cannabis. Our goal is to get millennials, Gen Xers and tourists in Denver who enjoy spending their money on experiences over things, which is an overwhelming majority in those groups of people since the pandemic. We want to be the place to be on a Friday night if you enjoy cannabis. During the day, it's high tea, and during the evening, it's a little more romantic, with a date-night vibe.

We have renderings of the Rose Room now, which is the private ballroom in Cirrus. We're keeping renderings of the main area closer to our chest until we open. The Rose Room is our private ballroom space that seats fifty to seventy people. I see it being used for wedding rehearsals and receptions, or for cannabis growers and extravagant tastings. For example, if Green Dot Labs wanted to do a tasting of their new strains, then our Flight Attendants, our servers at Cirrus, would provide that tasting experience and give them the best chance at giving a great tasting experience to their customers.

But you are now pursuing a micro-sales model for Cirrus, correct?

Yes. I was always interested in going that route. Our original investment partner had some concerns around federal regulations 280E [IRS tax restrictions], so we held off at first. Once we brought in more investment partners, though, they thought it was important to have a sales element as well, which I agree with.

To me, the most important aspect is my guests' safety, making sure we know what they're consuming and picking strains and methods that work well for first-time consumers. That's the best approach for our business.

How has the community response been to the change in business model?

I think this time we have more community support since we've put up signage on the outside of the building. It has resulted in a decent influx of emails and Instagram messages from people who are excited about what we're bringing.

I haven't heard anything in opposition yet. There is always the risk of that, but I am going to be at the hearing and am willing to hear any concerns people may have, and I want to address them appropriately. We're investing heavily in the neighborhood with the exterior remodel, and we are hiring full-time security, which should help with safety in the area, and we plan to give back to community organizations, such as the South City Park and Congress Park neighborhood organizations.

How hungry do you think Denver's cannabis community is for a place like this?

Our buildup of over 4,000 Instagram followers shows the direction of things for a business that doesn't exist yet. We have a wait list of brands that want to participate in events, and we have a wait list of brides who want to use the Rose Room for parts of their weddings. People are banging on our doors for this to get open, which is interesting, because some people we talk to about investing often question if there's a market for this. I don't know how to convey how excited and ready Denver is for this.

When you envision Cirrus's opening, what comes to mind? What are you most excited to take in during a Cirrus session?

When I envision and manifest what this will be, I imagine walking around and meeting groups of people I've never met before. They're happy and dressed in their floral best to come to Cirrus for a session. Everyone is giggling and happy, and I'm making table touches as the owner. It's all about the look on their faces when they walk in the door, and unleashing something new on society. That's what I'm really excited about.