How Marijuana Legalization Impacts Hotels
October 10, 2018 11:57am
By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
With national legalization of marijuana in Canada coming into effect on October 17, 2018, it raises quite a few lucrative opportunities for hotels to capitalize on this new market, as well as a few cautionary notes. Further, with numerous states already adopting similar policies and even more soon to join the fold, this trend is one you must pay attention to.
For starters, you must ask whether or not there is any money to be made in marijuana tourism. While you can certainly draw affirming statistics from the likes of anomalies like Amsterdam or Copenhagen’s Christiania District, a more suitable case study would be to analyze tourism to one of the American states that has ratified full legalization in the past few years, specifically Colorado.
Has Colorado seen a nonnegligible spike in tourism and room nights booked since legalization? Are there any other contributing factors that we must isolate before we can make a definitive conclusion about this drug’s influence on the hospitality industry in that state?
These are big picture questions that are fun to mull over, and my hypothesis, for Colorado at least, is that the introduction of marijuana friendly vendors has indeed spurred an uptick in incoming visitors, albeit a minor one at that. However, the issue remains that once legalization rolls out to numerous other states, that halo of exceptionality bestowed upon the current handful will likely wear off.
To get more granular, is there any money to be made by branding your hotel as a marijuana friendly lodging (provided it’s legal in your territory)? While this could certainly result in an increase in occupancy because you would be adding a strong differentiating factor to your property as well as introduce a new potential revenue stream if you were to convert part of your gift shop into a dispensary, you may also run the risk of turning off those guests who are not ‘cannabis inclined’.
This may include families who don’t want their kids exposed to such behavior, business travelers who don’t want to be associated with such behavior and those who morally object to such behavior. As well, you may overwhelm your housekeeping department who will inevitably have to fumigate rooms or deep clean the carpets on a regular basis. Like most new ventures, it’s a push-pull that must be weighed against other factors.
At the luxury end, I can foresee select wellness resorts embracing legalization as part of their therapeutic approach, perhaps even by obtaining their own marijuana production license and growing their own craft strain to sell to their guests. On that note, with an incredible network of chefs already at your disposal, many hotels may want to partake in the creation of boutique cannabis edibles, either for sale at various onsite F&B outlets or for distribution elsewhere. There are a host of possible ways to get involved and these are but a few that come to mind.
As with most changes at the state and national level, senior managers must stay on the pulse in order to fully grasp how these current issues can affect their properties or instigate new travel trends. While this is a niche opportunity, at the very least you would be wise to treat it as a fun thought experiment with the rest of your team so that, when the occasion does indeed arrive, you already have the proper brain trust established so you know how best to respond.
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Editor’s note: To discuss business challenges or speaking engagements please contact Larry directly.
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One of the world’s most published writers in hospitality, Larry Mogelonsky is the principal of Hotel Mogel Consulting Limited, a Toronto-based consulting practice. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Larry is also on several boards for companies focused on hotel technology. His work includes four books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013), “Hotel Llama” (2015), and “The Llama is Inn” (2017). You can reach Larry at firstname.lastname@example.org to discuss hotel business challenges or to book speaking engagements.
Contact: Larry Mogelonsky
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