Palm Springs just issued a permit for what may well be the first legal cannabis lounge in Southern California — a place where people will be allowed to smoke and hang out in the way drinkers can gather at a pub — triggering a standoff with a neighboring business owner who’s worried about odors.

Coachella Valley Green Dragon doesn’t have an estimated opening date yet, and the owners still have a couple regulatory hurdles to clear before they can welcome marijuana consumers. But they’re positioned to open the only public space within 400 miles where adults 21 and older will be able to legally consume cannabis in a social setting.

If that happens, Casey Bahr — who for 20-plus years has leased space for his Revive Wellness Center and Revive Salon & Spa in a portion of the same building coveted by Green Dragon — said he’ll be forced to relocate.

“We can’t subject our clients and patients to that kind of indoor pollution,” Bahr said, adding that he believes the city’s strict odor control requirements won’t be enough to prevent an offensive smell from reaching his customers.

Rick Thompson, clockwise from left, Keith Baskerville and Xavier Baskerville smoke marijuana while sitting in a booth in the smoking lounge at Barbary Coast Dispensary in San Francisco on March 1, 2018. (AP Photo/Jeff Chiu)

It’s illegal to consume cannabis in public, a restriction included in the 2016 ballot measure that legalized recreational marijuana in California. That measure, Proposition 64, also gave landlords the right to regulate marijuana use on private property.

So, while a small number of hotels are permitting consumption and a few marijuana-themed festivals are held throughout the state, those two provisions can severely limit legal cannabis use for certain groups, including tourists and many renters.

One potential solution are cannabis lounges, which California cities can choose to permit. Though state law offers only a few hurdles to lounges — they can’t operate within 600 feet of schools, they can’t let people consume alcohol or tobacco in the same venue, and they have to keep all cannabis consumption out of public view — only San Francisco and Oakland have issued permits. West Hollywood and Cathedral City have said they plan to allow lounges, but they have yet to give the green light.

In December, Palm Springs voted to welcome standalone cannabis lounges. And on June 14, the city gave Coachella Valley Green Dragon a permit to open a lounge inside a portion of a building on Palm Canyon Drive, in a spot that used to be occupied by a hearing aid center, according to records from Veronica Goedhart, a paralegal with the city attorney’s office.

The plan, Goedhart said, is for the operators to have a dispensary on the first floor and a lounge on the second floor.

Neighbor opposes lounge

The space leased to Coachella Valley Green Dragon takes up about 25 percent of the building at 353 S. Palm Canyon Drive. The rest is occupied by Bahr’s medical spa and salon businesses.

A property manager for the building emailed Bahr in February to tell him that cannabis clients were interested in leasing the vacant space that shares a wall with his business, and she wanted to first know his thoughts. He wrote back that a marijuana business would have “a negative effect on any adjacent business and property values,” insisting they “should always be housed in a stand-alone building.” But Bahr says that was the last he heard of it until he was called for comment on this story.

Bahr personally supports medical marijuana rights. But he does not support recreational cannabis, saying he believes it will “degrade” society.

When it comes to the lounge, Bahr said smell is his main concern. A computer repair shop he frequents in town recently had a cannabis business move in next-door, and Bahr said the entire store “reeked” of marijuana.

“I think it ruins the building for occupancy for anybody else but a pot-based business.”

Palm Springs officials are “aware of the odor associated with cannabis lounges,” Goedhart said, and the city requires business owners to “include adequate measures that minimize nuisances to the immediate neighborhoods and community the detection of odor.” Detectable odors, she said, will be handled as a public nuisance, and that the city has the right to “pursue all administrative, civil and criminal remedies” if it becomes a problem.

Final approval still needed

The Coachella Valley Green Dragon project still needs city approval for “minor modifications” planned for the property, according to owner Manuel Semerdjian, who also owns the Green Dragon Caregivers dispensary in North Hollywood.

Skyler Fortuna uses a small blow torch to clean a dab rig at the Barbary Coast cannabis lounge in San Francisco on March 15, 2018. (Jane Tyska/Bay Area News Group)

The project also needs a waiver from the city council, Goedhart said, since the dispensary and lounge won’t have a 500-foot buffer between them as required by city law. She couldn’t say when that hearing would take place.

With approval still pending, Semerdjian didn’t respond to further questions about the project, including queries about the possible conflict with the neighboring spa

Palm Springs has received five more applications from would-be cannabis lounge operators, Goedhart said. They’re all in various stages of the approval process.

The city didn’t place a cap on the number of lounges they might permit. But they did include a rule that says there can’t be more than three facilities within 3,000 feet of each other, a buffer they hope will prevent oversaturation.

Since four of the six lounge applications they’ve received are for properties along Palm Canyon Drive, Goedhart said that saturation rule may come into play.

Lounges coming to two more cities

Nearby Cathedral City approved lounges in February, allowing licensed shop owners to apply for permits to add social-use spaces. But four months later, the city still hasn’t made those applications available.

Nicholas Hughes, owner of Cathedral City Care Collective North, said he’s anxious to get a permit to convert a portion of his shop on Cathedral Canyon Drive into a lounge.

Hughes hopes to use the lounge as a way for staff to educate people about how to safely use the wide range of cannabis products now legal in California. He hopes to help guests have some fun in the space, too, using it to host events such as bachelor parties.

West Hollywood heard from a flood of aspiring lounge owners when the city opened its application period, with roughly 100 applications submitted before the window closed May 31, according to Jackie Rocco, who oversees the program as West Hollywood’s manager of business development.

Those applicants are competing for 16 standalone lounge licenses. That includes eight permits for lounges that will let people smoke, vape or eat marijuana products, and eight others for lounges that will only let people eat cannabis-infused edibles. Eighty percent of applications were for smoking lounges, Rocco said.

Given the number applications they received, Rocco said she expects the screening process to continue through September. Aspiring lounge owners then will be asked to go through the planning application process, plus get a business license from the city and a cannabis license from the state.

Depending on the complexity of the proposed projects, Rocco said the first cannabis lounge in West Hollywood could open in spring of 2019.