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3 key issues for commercial leases in the cannabis industry

The cannabis industry is growing by leaps and bounds, and a lot of enterprising folks are interested in getting into the industry.

Naturally, that means finding a place to operate. Because marijuana is still illegal at the federal level, commercial leases for anybody in the cannabis industry continues to require a lot of flexibility and caution – from both landlords and renters.

Property owners and tenants alike need to keep a lot of different things in mind when they’re looking at locations for their cannabis operation. Let’s look at some key factors

Zoning issues

Location is always a big deal for any business, but the nature of a proposed cannabis operation requires some extra thought. Growers need to look for areas that are zoned for agricultural use, while manufacturers probably need to look for an industrial area. Dispensaries, naturally, may have the most difficult search. They need to find a spot that is easily accessible and safe for their customers.

Custom-tailored leases

Ditch the form leases. If you’re an experienced commercial landlord, you may have developed a form that you prefer, but they won’t work for cannabis leases. If you’re a tenant, you can’t afford to sign a cookie-cutter lease.

California law (and many local laws) require the landlord to specifically authorize the tenant to obtain whatever licenses they need for their cannabis operation. (In addition, to protect the tenant, there need to be provisions that allow for the fact that the property will most definitely be used in violation of federal law.)

Local resistance

Roughly two-thirds of Americans think marijuana should generally be legal for adult use, but they may not be so keen on having a cannabis business down the road from where they live. Be ready to encounter local resistance against a proposed operation.

Whatever the issues you may encounter, both landlords and tenants can benefit from experienced guidance when dealing with a cannabis lease.