If you've pictured opening your own cigar lounge, you may remember the height of the cigar era in the 90s.
Your favorite celebrities were spotted with a fresh roll between their lips, turning the cigar into a symbol of wealth and status. Think Michael Jordan's famous cigar photo after his three-peat, or Demi Moore gracing the cover of Cigar Aficionado magazine in 1996.
Demi Moore for Cigar Aficionado, 1996
The 90s are long gone, but cigar lounges are reignited — and Gen Z fans the flame. Burned out by screens, self-service kiosks, and chatbot customer service, younger smokers want what a lounge offers: calm, prestige, and the personal service robots can't replicate.
This is as good a time as any to turn your cigar lounge dreams into a neighborhood reality. In this blog, you'll learn how to open a cigar lounge and get insight from a fellow entrepreneur.
Let’s get started.
Learn From a Lounge Owner Who Built It From Scratch
The cigar comeback opens a door for entrepreneurs, and some owners are already walking through it. Today's smokers want a gathering place to call their own, and a well-run lounge gives them exactly that.
Corey Grant purchased Tobacco Town in Trenton, Mich., in 2020 with no retail experience at all. He’s since built a thriving tobacco shop and cigar lounge known for its fine cigars, pipe tobacco, and entertainment like a pool table and golf simulator.
But his success didn't come from a big marketing budget or a prime location. "What makes us unique is the culture we create," Corey said. You can build that same culture, and his hard-won lessons run through the steps below.
Insider's draw: Spend time in other cigar lounges before you open your own. Seeing how they handle their regulars and their slow afternoons will teach you what your own space needs to get right.
Ready to write your own success story? These five steps take you from legal groundwork to grand opening.
1. Cover the Legal Basics
Before you open a cigar lounge, you need to file the paperwork to establish a legitimate business. The tobacco industry is tightly regulated at both the state and federal level, so start your research and license application as early as possible.
Establish Your Business
To complete your tobacco license application, hire employees, and secure funding, you need a legal entity and a federal employer identification number (EIN).
Most cigar lounges operate as sole proprietorships or limited liability companies (LLCs). Each state has its own process for establishing an LLC, so check with your local small business office for details. You can apply for an EIN online with your business type and Social Security number.
Apply for a Tobacco Retail License
Most states require a license to sell tobacco, so your next step is to start the application process. It looks different from state to state, but here's a general overview:
- Prove your compliance with zoning laws. Many states limit how close tobacco retailers can be to schools, hospitals, and places of worship.
- Gather your documents. You may need proof of occupancy, floor plan sketches, financial statements, and a background check.
- Apply online and wait for approval. Most states have a simple online application, but review and approval can take time.
- Comply with your state's tobacco laws. To keep your license in good standing, make a plan for age verification, sales and inventory reporting, and other compliance needs.
Snags in the licensing process are the most common cause of grand opening delays, so prepare your application as soon as you have the necessary paperwork.
Meet Other Legal Requirements
Since a cigar lounge is an indoor smoking establishment, your state may have additional requirements. You may need to prove exemption from nonsmoking laws, install approved fire suppression and ventilation systems, or schedule a fire department inspection.
Related Read: How To Get a Tobacco License in 4 Steps
2. Design Your Space
Now you get to bring your cigar lounge to life, starting with location. Today's smokers are after an experience, not just a place to buy cigars. The right space sets you up to deliver one.
Choose somewhere easy to reach from main roads, with parking and visibility from the street. Don't forget to measure your proximity to competing lounges and smoke shops.
Install Air Filtration and Ventilation
Proper air filtration and ventilation protect the health and safety of your employees and customers, so invest in the right air purifiers and equipment early. Here's what you need and why each piece matters.
The easier customers can breathe in your lounge, the longer they'll want to stay.
Insider's draw: Size your ventilation for a packed house, not an average night. Owners almost always underestimate how fast smoke builds when every seat is full, and retrofitting a bigger system after opening costs far more than building it in from the start.
Plan Your Floor Plan and Furnishings
Your customers should move through the lounge with ease, whether they're browsing your display cases or settling in for a smoke. Offer a mix of seating for solo patrons, small groups, and larger parties, with ample space in between. When choosing furniture, look for fabrics that hold up to heavy use and resist odor.
Related Read: The Ultimate Guide to Cigar Lounge Layout & Design
Set the Mood With Design and Decor
Stepping into your cigar lounge should feel like entering another world, wrapped in luxurious furniture, rich color, and low light. Leather and wood are the classic materials, paired with vintage tobacco ads, signage, and collectibles. Many owners lean into sports or music themes, too.
Corey leaned into that atmosphere at Tobacco Town. His clubhouse feel comes from intentional touches like the pool table and golf simulator, which give customers a reason to linger and spend more time in the lounge.
3. Encourage Cigar Sales
You've built an environment that draws cigar enthusiasts in. Now comes the part that keeps your lounge open: turning those visits into sales.
Build a Cigar Selection and Displays
Your cigar lounge should have something for everyone, from curious beginners to seasoned collectors on any budget. Stocking across price points and experience levels keeps more customers buying.
How you display those cigars matters, too. A walk-in humidor, freestanding cases, or easy-access wall shelves all work, as long as you keep them well-stocked and organized. Attractive displays double as lounge decor and drive sales on their own.
Create an Easy Checkout Process
Your team members are vital to the sales process. A great staffer guides customers through your displays, makes recommendations they trust, and keeps the line moving at checkout.
We recommend a point of sale (POS) system designed for cigar lounges. The right one prompts cashiers to scan IDs on every sale and lets you check customers out from anywhere on the lounge floor. Barcode labeling shortens checkout and sharpens inventory accuracy, so look for a system that prints custom cigar labels.
Corey ran into this early. With thousands of SKUs across individual cigars and full boxes, he knew manual counting and paper records would be a nightmare. He switched to a tobacco-specific POS and now receives new inventory, labels it, and gets it on the floor within minutes.
Insider's draw: Look for a POS with real-time inventory tracking, product ranking, and automated purchase orders. This combination keeps you from running out of your customers' favorite smokes during a rush.
4. Attract Loyal Customers
Building community is one of the most important parts of starting a cigar lounge, and it's exactly what today's customers are after. The younger crowd driving the cigar comeback wants a place to belong, not just a place to buy. Marketing to them can be tricky under tobacco regulations, but a few strategies work without any headaches.
Generate Hype on Social Media
Your marketing should start well before your grand opening. Use social media to connect with potential customers and build anticipation for your new business. Give them a reason to follow along, whether that's a behind-the-scenes look at your build-out or a sneak peek at the cigars you'll carry.
Once you're open, keep the momentum going. Educational posts about cigars bring new smokers in, and followers-only promotions reward the people already paying attention.
Stay in Touch With Email and SMS
You can also build community through an email or SMS marketing newsletter. This gives you a direct line to your customers, so news about new arrivals and upcoming events lands right in their inbox.
Corey's loyalty program does double duty here. Customers enter their phone number at the customer-facing screen to track points, which lets Tobacco Town collect contact info effortlessly and reach the community through email and SMS.
Launch a Customer Loyalty Program
Want to encourage regular visits? Consider launching a loyalty program. Customers earn points on every purchase to redeem for discounts or perks, like access to rare and exclusive cigars. Your POS system should make the program easy to manage, so look for one with built-in marketing tools.
Related Read: Premium Cigar Markup: 7 Luxury Product Pricing Strategies
5. Take Your Cigar Lounge to the Next Level
You know how to open a cigar lounge. Now, let's talk about growing it. Here are a few creative ways to widen your reach and bring in new revenue:
- Start a cigar club. Build a community with a formal cigar club. Host monthly meetings where members try rare smokes and earn perks they can't get anywhere else.
- Host events. Become your neighborhood's go-to spot for bachelor parties, birthdays, and retirement celebrations by renting out your space. Entertainment like large TVs, pool tables, or a golf simulator makes the offer even stronger.
- Partner with local entertainers. Showcase local talent to draw a new crowd. Reach out to comedians and musicians, and pair their set with an attendee-only cigar deal.
The cigar lounges thriving today are the ones that give people a reason to come back. Build that, and you're not just running a shop. You're anchoring a community.
How To Open a Cigar Lounge With Cigars POS
The lounges that packed houses in the 90s had the culture but not the technology. You get both. You've taken the first step toward opening your cigar lounge by doing your homework, and the next is finding the system that runs it all.
Schedule a live, personalized demo of our all-in-one cigar lounge POS system, Cigars POS. It has everything you need to launch and grow your business, including:
- Secure age verification
- Tobacco-specific inventory management
- Cigar label printing
- Loyalty program and membership management
- Built-in high-risk payment processing
- In-depth sales reporting and analytics
You'll also have our team of tobacco industry experts in your corner to get you set up for success. Just ask Corey, who started Tobacco Town with no retail experience and built it into his neighborhood's go-to lounge.
Ready to build your lounge? Schedule your demo today.
