Location, Location, Location: Navigating Cannabis Real Estate By Robert Hoban

Location, Location, Location: Navigating Cannabis Real Estate By Robert Hoban
CANNANNEW REPORT

Legalizing cannabis has created a land rush. The first step in any new cannabis market, or towards any commercial activity in cannabis, always begins with the question of where – the real estate. Finding a suitable property is probably the most difficult piece of putting a business together in this industry. Locating such properties has created a whole new niche market for lawyers, consultants, and real estate brokers in aiding the marijuana industry’s entrepreneurs as they locate a properly zoned location. In addition. cannabis industry businesses require a great deal of real estate for uses such as cultivation sites, retail outlets, testing laboratories, extraction facilities, storage facilities, and kitchens. These varied real estate needs carry with them a morass of state and local regulations, and navigation requires professional assistance. Robert T. Hoban Member rhoban@clarkhill.com Denver +1 303.674.7000 While traditional real estate principles tend to govern, these issues are uniquely twisted to adapt to the cannabis industry, or in many case, where the cannabis industry has to adapt to these fundamental items. Make no mistake, it is not easy to navigate cannabis leases, zoning, and licensing regulations. Brokers who specialize in this area tend to be very helpful. However, an entire level of additional items emerge concerning “takings,” taxes, distance requirements, and mortgage “illegality” clauses, just to name a few. It is important to note that cannabis licenses are often tied to (or even required to be tied to) a piece of real estate. Once zoning issues are addressed, the next items to examine include site plans, security, and other site specific concerns related to licensing. Furthermore, there are issues specific to landowners and landlords. These difficulties include obtaining mortgages and financing, title insurance problems, marketability issues (for example, there are fewer institutional buyers due to legality covenants), rent, percentage rent (landlords must ask themselves if the property is this…

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Source : Location, Location, Location: Navigating Cannabis Real Estate By Robert Hoban

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