"Permitting use at specifically licensed premises recognises that some people, such as tenants and people with children at home, cannot or may not wish to use cannabis at home," the paper says.
"Licensed premises may also provide an opportunity for staff to monitor and promote safe consumption behaviours."
Drug Foundation executive director Ross Bell said those seemed like "pragmatic" steps, though he was cautious about commenting without seeing further details.
"Some people would need a safe place to consume cannabis. Some landlords won't allow smoking in their places, for example," Bell said about having special cannabis bars.
Prime Minister Jacinda Ardern, in her post-Cabinet press conference, would not be drawn on any details other than to say that whatever is proposed is not a Government position, but one for the public to consider.
She said leaks of Cabinet papers were serious, but she was confident it had not come from a minister and was not interested in holding an inquiry unlikely to yield a result.
The leaked paper warned about allowing cannabis to be consumed in public places because it would expose people to second-hand smoke and could normalise cannabis use for children and young people.
The paper showed that a lot of work still needed to be done, National drug law reform spokeswoman Paula Bennett said.
"And it's all highly contentious. There's at least two sides to pretty much every decision you have to make, both of which have validity, but need to debated in the most open, transparent way.
"That's what my concerns are."
On Sunday Bennett released the four referendum options in the paper, only one of which would make it binding by passing a law that would be enacted if there was a "yes" vote.
The Labour-Greens confidence and supply agreement, which commits to the referendum, contains no wording about making the referendum binding, though Little has said that it will be binding.
The Cabinet paper also supported a legal purchase age for cannabis of 20 to deter young people from using cannabis, noting that frequent use by young people can be harmful for brain development, which continues until the age of 25.
The paper considered an age of 18, the current purchase age for alcohol and tobacco, but said that it would create more chances of 18-year-olds buying cannabis to supply younger people, and could normalise using cannabis for secondary school students.
Bennett said the proposed age of 20 seemed to have been "plucked" from nothing, but she did not have a preference for what the age should be, saying it should be up to the public to decide.
