If you are planning to lease cannabis real estate property, there are certain factors you should take into account. The legalization of marijuana has always been an issue in many states. However, if you pay attention to details, you can avoid committing common mistakes. This way, you will end up having significant advantages from your cannabis real estate investment.
Here are a few do’s and don’ts of leasing cannabis real estate mentioned.
- Do’s
- Consider Location
Location plays a major role when it comes to leasing cannabis real estate. You must know the objective of your business and the use of the property before you start searching for a suitable location. For instance, if you want to grow cannabis as a cultivator, you should look for rural areas. But those who want high-volume sales must look for commercial areas with greater populations.
Moreover, you should take the unemployment rate and local workforce of that area into account before making a final decision. If you are contributing towards decreasing unemployment rate of a state or community, you are highly likely going to get the approval for your project.
- Inspection & Access
As a tenant, you must make sure that landlord’s right of inspecting the marijuana premises doesn’t cause any hindrance in your way of operating according to the state law. This way, the risk of losing a license will also reduce.
As a landlord, you should protect your right of inspecting the marijuana premises to ensure that the tenant doesn’t cause any damage to it. You must also ensure that he operates according to the local and state laws.
- Don’ts
- Avoiding Permits
The one thing you should never do is securing leases without getting permits or state licenses. There is an obvious risk factor involved in this process. If you don’t operate legally, you won’t be able to meet rental obligations. So, the lease must include a period during which the tenants get the permit. Both the tenants and the landlord must communicate the details to be able to enjoy the fruits of this cannabis real estate industry.
- Not taking Professional Help
Never take the responsibility of everything on your shoulders without involving experts, especially when it comes to leasing the cannabis real estate. Instead, you should hire professionals who know how to fulfil the terms, conditions, and restrictions without violating the laws. An expert can also guide you about the loan’s requirements for the security of both tenant and landlord.
- Considering Form Leases
Don’t consider form leases even if they look convenient in the short run. Otherwise, it can result in a significant loss of time and money. Both tenant and landlord should customize the lease for the specific type of cannabis business they intend to do. When the property is made exclusively for its intended use, the chances of cannabis real estate business being successful are higher. However, it should be flexible enough to deal with the unstable legal environment of the state.
