A concept drawing of Coachill Inn Resort in Desert Hot Springs, California. Roger Bloss, former CEO and co-owner of Vantage Hospitality Group, has created Alternative Hospitality Inc., to operate a chain of cannabis lifestyle hotel properties in the U.S. Alternative Hospitality is a subsidiary of MJ Holdings Inc., a cannabis cultivator in Las Vegas, Nevada.
Marijuana consumption in America has lost its stigma. It is on track to become a $23 billion U.S. market over the next couple years.
Hotels in states that have legalized recreational and medicinal marijuana are just beginning to think about how to incorporate the trend into their businesses.
The laws can be confusing. Cannabis use is not legal in every state. Each state where it is allowed has its own regulations. And marijuana use and distribution are still outlawed by the federal government.
This map from Insider Inc. shows the legal status of marijuana use in the United States.
But the landscape is rapidly evolving on many fronts. And hoteliers and hotel developers in legalized states are figuring out how to navigate and claim a stake in the new frontier of weed.
For these business people, enabling customers to use marijuana is not about getting high, it’s about wellness – for their guests as well as their business’s bottom lines.
Beej Das is CEO of Troca Hotels, which owns and operate the Stonehedge Hotel & Spa in Massachusetts, where marijuana use was legalized this year.
Beej Das is a jack of all trades. His professional stints include engineering, practicing law, and working with Hilton as senior director of development for South Asia. Last year, he ran for Congress but lost.
Das is an entrepreneur. As CEO of Troca Hotels for the past five years, Das owns and operates independent luxury lifestyle properties in New England and Florida.
The Stonehedge Hotel & Spa in Massachusetts has five rooms set aside for guests who choose to make marijuana part of their stay experience.
Das had experience with the illegal aspects of marijuana when he worked as a law clerk for a federal judge who tried a high-profile case.
Das sharpened his progressive view on the legalization of the substance over the past 10 years. He voted in favor of legalizing marijuana use in Massachusetts when it was on the ballot in 2016. In November of last year, retail sales from licensed businesses became legal.
At the time, Das did not think about integrating the use of the substance in his hospitality business.
He began to market the Stonehedge rooms and cannabis use as a guest amenity on April 20, a de facto national holiday for those in favor of marijuana use.
Guests can smoke marijuana on their room balconies and in various locations throughout the 12-acre property. The smoking areas are relaxing, but secluded so as not to offend or irritate other guests.
The odor of burning marijuana is a bear to get out of guest rooms so Stonehedge encourages cannabis users to vape, going so far as to offer C-cell cartridges branded with Troca Hotels.
Das said making cannabis use part of the Stonehedge culture was a business decision.
“The reason we did this was not necessarily as promoters of the consumption of cannabis but rather to attract a consumer base we know quite well. We know them to be interesting and thoughtful leaders of our society,” Das said. “It was decision to promote individual freedom of choice and a cultural norm that allows people to do what within a reasonable society people can do.”
Most cannabis users are artists and musicians who attract followers with their “big” personalities. Even those who do not imbibe enjoy being in the company of such folks, Das said.
“So as a brand-positioning perspective we lead with that because we do believe cannabis users attract non-users in social spaces. You’ll often see an intermingling that fascinating.”
The law in Massachusetts is catching up to popular expectations, Das said. For example, Trocas Hotels has a property in Maine, where the law is farther advanced. Das is considering whether to add cannabis programming there.
“Over time, it will be interesting area for hotels to go. We have started with selling CBD products into our gift shop, and we will be looking at integrating CBD into our spa.”
Selling THC products – the stuff that gets you high – is whole other avenue. Das said he stays away from distribution to avoid running into legal trouble. State law is still not clear on the issue and federal law prohibits it. For guests who want to buy marijuana, the hotel will direct them to legal dispensaries.
“We’re trying to be curators of an experience,” Das said. “We are trying to be as supportive of people’s decisions to use the product and point them in the right direction.”
It’s similar to guiding guests seeking out a unique local dining experience. “In the lifestyle space we are in the business of nuance, and it’s that nuance we are looking to celebrate in the cannabis program.”
For hoteliers thinking of integrating cannabis-friendly programming or amenities into their properties, Das offers some tips.
First, research local and state laws to avoid legal problems.
“Second, be thoughtful about it,” he said. “The goal for us is to integrate users and nonusers to create a social environment that promotes integration. That’s one way of doing it. But there’s also a clientele in the cannabis world where you can have a pot friendly hotel that’s not as friendly toward non-users. There’s a spectrum and you have to know your swimming lane and be thoughtful about it delivering on it.”
Lastly, Das advises hoteliers to have fun with cannabis programming. “This is an area that’s rapidly evolving. Capital sources are interested in this space. We have had investor interest because there’s nothing else like it.”
What is it?
The use of cannabis is seeing new norms, indeed.
In December, President Trump signed the bi-partisan-approved $867 billion Farm Bill that legalizes cannabis. The bill amends the controlled substances act of 1970. And it’s the first time the feds have made any distinction between strains of cannabis.
It’s not a huge step, but it is significant.
The bill legally redefines hemp as being any C. Sativa plant that has low THC, the chemical that gets you high.
So, just what is cannabis?
Marijuana, cannabis and hemp are members of the same family. Cannabis is associated with wellness and marijuana with recreation. But they’re the same thing.
Cannabis comes from the Greek word kannibus with a K.
It is a genus of plants of 3 species or strains – Cannabis Sativa, Cannabis Indica and Cannabis Ruderalis. (Rue-der-alice)
Stavia and Indica are typically found at marijuana dispensaries.
Marijuana is so called because it first came to the U.S. via Mexico where it is spelled marihuana.
Marijuana is made from the dried flowers of the cannabis plant. It’s traditionally viewed as the recreational part of cannabis because it has THC.
The cannabis plant has been grown to make rope, canvas and paper. It was a popular crop in the Midwest during World War II.
Hemp also produces CBD, another chemical in cannabis. It does not get users high.
CBD’s real name is cannabidoil. It is found in the seeds, stalks and flowers of the cannabis plant.
CBD is used in wellness products. CBD is legalized in all states but Idaho, Nebraska and South Dakota.
Research scientists have discovered that CBD offers a lot of health benefits, including pain relief. It has anti-anxiety and anti-inflammatory properties, and some trials show it has eased or eliminated seizures.
Ten years ago, it’s the wellness properties that turned Roger Bloss onto cannabis.
Bloss is co-founder of Vantage Hospitality. He and partner Bernie Moyle sold the company to Red Lion Hotels Corp. in 2016. They both semi-retired from Red Lion last year.
Roger Bloss last year launched Alternative Hospitality with MJ Holdings. The new venture will operate a chain of cannabis-focused lifestyle hotels.
Bloss moved on the business of cannabis, partnering with Kenny Dickerson in California and a publicly traded cannabis company called MJ Holdings Inc. in Nevada.
Last year, MJ Holdings formed Alternative Hospitality, headed by Bloss. An MJ Holdings’ shareholder update in December said the new subsidiary will operate a chain of cannabis lifestyle hotels.
In April, MJ Holdings announced the construction of a 150-room hotel called the Coachill Inn Resort in Desert Hot Springs, California. It is the first of eight planned cannabis-friendly hotels.
The lifestyle property will be part of the 160-acre Coachillin’ Cana Business Park.
Kenny Dickerson is a general contractor and co-owner of Coachillin’ Holdings Inc., which is building the eco-friendly, sustainable business park where cannabis will be grown and processed.
The partnerships will marry cultivation, research, distribution, investment, wellness and hospitality – a first for the cannabis industry in America.
Bloss gives his take on what the project means to hospitality, especially in this age of experiential travel.
“The thing that interested us was it gave us the opportunity to incorporate the cannabis side with hospitality.” He likens it to the wine industry that attracts tourists who visit wineries, attend tastings and educational sessions to learn about the intricacies of the fermented fruit and the culture it breeds.
‘Opportunity to Explore’
In the cannabis industry are many different types of products and remedies.
Coachill Inn and the park “gives guests the opportunity to explore and to discover things about these products that help them both physically and spiritually,” Bloss said.
The surrounding park will include meeting space, an amphitheater, a sports complex and a brew pub. Guests and visitors will be able to tour the production and testing facilities to learn about the healing powers of cannabis. They’ll also be able to purchase products at a separate dispensary in the park.
The property will be non-smoking. Bloss said the branding of Coachill Inn is focused on wellness. He wants users and non-users to be comfortable during their stay.
Bloss said he has grown more interested about personal health and wellness over the past 10 years. At the advice of his doctor, he has used cannabis-infused products to manage pain and improve his overall well-being. He believes our bodies are naturally receptive to the healing powers of the plant.
Meantime, Kenny Dickerson was involved with his construction business. He is known for building environmentally friendly facilities that are energy efficient and preserve natural resources. Most of his customers come from the medical industry.
In January 2018, California legalized the use of recreational marijuana. When the city of Desert Hot Springs approved the cultivation of cannabis, Dickerson began to get phone calls from developers and investors. Admitting ignorance about the cannabis movement, Dickerson at first he thought they were pranksters.
Still not certain what this cannabis thing was all about, Dickerson called his son, Michael, who worked for a venture capital firm in San Francisco. Michael quickly brought his father up to date.
“He gave me his speech, ‘OK Pop, here it is. More importantly, this is where it’s heading.’”
The numbers were jaw-dropping.
In their 2018 report, “The State of Legal Marijuana Markets,” Arcview Market Research and BDS Analytics say by 2022, the global cannabis market could be worth as much as $32 billion, a three-fold increase in just five years. The U.S. expected to fuel much of that growth with an expected market value of $23.3 billion.
MJ Holdings shows the anticipated growth of the cannabis industry in America.
Much of the growth is coming from California’s cannabis market, which is expected to exceed $5.1 billion market value this year.
With nearly 40 million residents and more than a million medical marijuana patients, California’s market represents about a third of the North American cannabis market, says the report.
To teach people about cannabis, the museum Canabition opened last year in Las Vegas.
Michael and his sister, Katherine, have joined their father in developing Coachillin Cana Business Park. It is a cooperative business model. Coachillin Holdings is the primary land owner and developer of the park. It is selling parcels and licensed business owners will own an interest in the park’s owners association. Dickerson estimates it will take 10 years to build out the entire site.
Meantime, the Dickerson family is leading the development of ancillary businesses, including a water-bottling plant that draws from a newly dug well on the property and a cannabis farmers market.
“We’re just treading in a lot of fresh water. This just has not been done,” Dickerson said. “The goal is to build a sustainable Business park with ancillary biz that are sustainable. Not talk about it but do it.”
WATCH: Check out this video that gives an overview of the development plans for Coachillin Cana Business Park.
The park and the hotel expect to draw guests from all over the world. Large events in nearby cities draw tens of thousands of visitors to southern California. The annual Coachella Valley Music and Arts Festival and the Stagecoach Festival take place 30 miles south of the park. Golf and tennis tournaments are held in the valley. Adding to the short-term visitors are thousands of health care consumers.
Bloss said Alternative Hospitality will build cannabis-friendly hotels only in conjunction with land owners. MJ Holdings will own 51 percent of the project. The land owner and other investors will make up the difference.
“We believe by opening up this park and resort we will allow people to have these experiences. And learn about the long-term benefits of it.”
Lodging Econometrics has tracked the hotel industry since 1998. Its global database includes new-hotel pipelines as well as renovations and brand conversions. Hotel franchisers once eager to launch new brands are focused on converting existing hotels because it’s a faster way to recover revenue lost to the COVID-19 pandemic than through new construction. In Episode 346, Lodging Leaders explores the increasing number of conversions in the U.S. hotel industry and what owners and operators need to consider before repositioning an asset.
In the first few months of the COVID-19 pandemic in the U.S., financiers anticipated a swell of distressed hotel businesses. Some raised rescue funds to respond to what they thought was a pending crisis. Though there are financial rescues taking place, the level of such activity is far below what industry advisers and fund managers expected. Commercial real estate investors positioned to act in the early days of the pandemic held off and are now just beginning to unleash their cash hoards totaling billions of dollars. Episode 345 of Lodging Leaders podcast explores the state of capital investment in the hotel industry.