Interested in starting a business in the cannabis industry? Congratulations! This is an incredibly exciting time to get involved. Legalization is on everyone’s minds and the learning opportunities abound. One critical aspect of business ownership is intelligent cannabis facility design. Whether your interest lies in construction or renovation, a cannabis growing facility or a cannabis processing facility, here are six tips for astute intention.

1. Deliberate planning is essential.

Although it is tempting to carve a place in the market as quickly as possible, careful consideration of the right spot and the right kind of business is critical. Additionally, current and future regulations are important factors in design planning, as well as thought regarding potential for expansion. Smart cannabis facility design must also involve security prioritization. This point ties together and ensures code compliance, retention of employees and overall business success.

2. Minimize environmental impact.

First, know the laws and permitting structure around any kind of construction. When compliance is established, go above and beyond to reduce impact as this will bolster relations with the community. Some examples are energy reduction, waste management and protection of natural resources. Jason MacDonald, Director of Cultivation Operations at Native Roots, one of the largest cannabis producers in Colorado, notes: “our energy impacts are large, and we’re well aware that growing indoors is not the most sustainable way to do it, but it is the way to get final, quality product that people are looking for. So we have tried to make changes wherever we possibly can save power.”

3. Allow for flexibility.

Anyone who follows the industry knows how quickly regulations can change. Even in states with relatively long-established legalization, updates are often on lawmakers’ minds. One instance of this is when cannabis facilities must adjust from medicinal cannabis production, processing and sales, to recreational. Being initially prepared for this kind of transition will be more cost efficient than a complete retrofit. One free way to allow for flexibility is to give yourself plenty of time. Site searching and planning is best done without the pressure of an impending application process. Partnering with experts and planning a cannabis facility on your own timeline makes for best results.

4. Technology is part of the process.

Top-of-the-line technology is key when competing in the cannabis realm. For instance, an alarm clock and a handheld watering hose are not likely the best way to resourcefully grow quality plants or make an impression on clientele. In fact, an expanding number of facilities are moving away from hand watering to drip irrigation, in some cases, by utilizing moisture sensors to monitor conditions in real time. Research and communication with knowledgeable professionals will result in topnotch facilities equipped with the most proficient technology.

5. Plan for hitches.

Hidden or surprise obstacles are often expensive and destructive to schedules. Best planning practices for these hiccups include reserved funds and a cool head, as well as a second set of eyes to review plans, evolving regulations, and the market, whether it be for a cannabis growing facility, a cannabis processing facility or even a dispensary. This advice is also applicable once the business is up and running; some current, universal obstacles such as challenges in supply chain and weather are notable.

6. Optimize efficiencies.

Smart setup can save time, money and frustration levels. Thinking about the steps necessary in a day and eliminating doubling back or excessive circling is ideal in cannabis facility construction or renovation. One suggestion by Director of Cultivation Kevin Biernacki is to augment your facility by positioning the mother room across from the clone room to reduce employee walking distance.

“Lay everything out so it’s workflow efficient. Our mother room is directly across from our clone room, so people don’t have to walk across the building to take clones. Our trim rooms are right next to the dry room, which is right next to the cure room. Its simple workflow layout, but it’s surprising how many people have a drying room on the opposite end from where they’re trimming.”

These insights are just a few ways in which smart planning for your cannabis growing facility is beneficial. Above all else, a quality team is worth its weight in gold, especially when navigating the cannabis market and cannabis facility construction. Instead of contracting multiple companies, Canna Real Estate Group offers a range of commercial cannabis real estate, architecture, construction, financial consulting, and cannabis consulting services all in one place. Our goal is to optimize the experience for clients who are interested in avoiding costly, time-consuming and stressful mistakes. Contact us today for a free consultation.

Until federal legalization is complete, each state has taken up the task of establishing personalized laws and regulations regarding cannabis. Get information organized by state on how or where to obtain a commercial grow license. From there you can initiate plans to build or buy a commercial grow facility.

• Alaska’s state agency is the Alcohol & Marijuana Control Office.
• Alabama cultivation licenses are issued by the Medical Cannabis Commission. Starting Sept. 1, 2022, applications will be accepted for an integrated facility license or a cultivator processor license.
• Arizona’s state agency is the Arizona Department of Health Services. For now, a grow license can only be obtained by first opening a cannabis dispensary.
• Arkansas’s state agency is the Medical Marijuana Commission.
• California cultivation licenses are issued by the California Department of Food and Agriculture.
• Colorado permits through the Colorado Cannabis website.
• Connecticut cultivator license lottery is currently closed.
• Delaware’s medical compassion centers are required to grow all sold product. The state is not currently accepting applications.
• District of Columbia licenses are issued through the Alcoholic Beverage Regulation Administration.
• Florida’s Department of Health only allows licensed medical marijuana treatment centers to cultivate, process and dispense low-THC and medical cannabis.
• Hawaii licensed medical marijuana dispensaries are the only businesses allowed to grow, process and distribute cannabis.
• Illinois permits through the Illinois Department of Agriculture website. The state issues two types of cannabis cultivation licenses: one for craft growers and another for an adult-use cultivation center.
• Louisiana has only granted Louisiana State University Agricultural Center and Southern University Agricultural Center permission to grow and cultivate here.
• Maine permits directly from the state’s Office of Cannabis Policy.
• Maryland Medical Cannabis Commission has 15 pre-approved growers, however no actual final licenses to grow have been issued.
• Massachusetts’s state agency is the Cannabis Control Commission.
• Michigan’s state agency is the Marijuana Regulatory Agency.
• Minnesota’s medical cannabis manufacturers must grow, process, and distribute to program participants. Two manufacturers are registered and the law does not allow for additional registration.  
• Mississippi Department of Health is currently accepting license applications for new cultivation facilities.
• Missouri’s Department of Health & Senior Services is responsible for overseeing and regulating the application process.
• Montana licenses through the Department of Revenue, Cannabis Control Division. Applications for new grow businesses will be available beginning July 1, 2023.
• Nevada licenses are issued by the state’s Department of Taxation via Marijuana License Applications. Updates on licenses can be found on the Cannabis Compliance Board website.
• New Hampshire is medical only; their alternative treatment centers are required to grow everything sold. The state is not currently accepting applications.
• New Jersey permits through the state Cannabis Regulatory Commission. The number of Class 1 Cultivators is to be held to 37 licenses until Feb 22, 2023.
• New Mexico’s Cannabis Control Division regulates all licensees operating in cannabis markets.
• New York permits through the Office of Cannabis Management. The application window for the Adult-Use Conditional Cultivator License was March 15, 2022 to June 30, 2022.
• North Dakota is medical only; their compassion centers are required to grow everything sold. The state is not currently accepting applications.
• Ohio’s Department of Commerce licenses and regulates medical cannabis growers.
• Oklahoma permits through the Medical Marijuana Authority. A new state law implements a moratorium on new grower, processor and dispensary licenses beginning 12:01 a.m. Aug. 26, 2022. The moratorium will last up to two years.
• Oregon permits through the Oregon Liquor and Cannabis Commission website.
• Pennsylvania’s Department of Health handles Pennsylvania grower licenses.
• Rhode Island utilizes the Office of Cannabis Regulation to issue medical cultivators licenses to produce for licensed compassion centers. Applications are not currently being accepted.
• South Dakota’s Department of Health handles grower licenses.
• Utah permits through the Department of Health & Human Services. New grow applications are not being offered now.
• Vermont’s state agency is the Cannabis Control Board. Vermont cultivator licensing is open and includes options for indoor growing, outdoor growing, and mixed cultivation.
• Virginia allows for five pharmaceutical processor permits to cultivate, process, and dispense medical cannabis to patients. Applications are not currently being accepted.
• Washington state permits through the Washington State Liquor and Cannabis Board. New applications are not currently being accepted.
• West Virginia’s Department of Health and Human Resources, Bureau for Public Health, Office of Medical Cannabis is not accepting applications.

Please review state agencies for updates, as laws often change.

Some states allow the purchase of an existing cannabis production company and license from an established party. This path is an alternative to waiting for applications to open and submitting anew, locating eligible real estate and starting new construction on a commercial grow facility. Existing commercial grow facilities can be upgraded and customized. As each site presents its own advantages and challenges, it is key to have a partner who is experienced in the industry to guide the way.

Canna Real Estate Group is the premier consultant for cannabis and marijuana real estate, cannabis financial services, and cannabis architecture and construction throughout the United States. We offer start-to-finish real estate consulting services for cannabis companies. Request a free consultation to discuss your plans and find solutions for your unique business needs. Our specialty is overcoming key obstacles that commonly cause disruptions in projects.

Businesses, much like cannabis, need room to grow. Those new to the industry as well as successful expanders and investors understand the importance of visibility. While the internet is helpful for research, it is often physical locations and the ability to discuss one-on-one with a live person that brings in new, consistent clients to cannabis. Cannabis and real estate are two industries that go hand in hand. Explore the world of 420 real estate investing.

420 Real Estate Investing

Those who currently invest in cannabis know that this market, like all others, has its ups and downs. Newly established state legalization will lead to ups, confusing regional mandates often make for downs. First, a review of the industry from a financial level. American companies that have lent money and provided sale-leasebacks to the U.S. cannabis cultivation and retail sectors have raised $517 million year-to-date as of May 19, 2022. This number is 232% higher than the total in 2021, and is an increase in the equivalent period in any previous year. Further, real estate is one of the few sectors in cannabis that has raised more money year-to-date than last year.

In comparison to a similar study conducted in 2020 on commercial real estate in states where both medicinal and recreational cannabis are legal, 35% to 36% of respondents had seen an increased demand in warehouses, 23% in storefronts, and 18% to 28% in land. States with both forms of cannabis that became legal within the past four years have seen the most increases in demand for commercial properties from cannabis-related businesses since the onset of the COVID pandemic. In 2021, the annual recreational cannabis sales of the United States peaked at $8.7 billion, and it is now predicted to be worth a reported $35 billion by 2025.

Also interesting is the perception that cannabis companies investing in real estate actually raises the value of the surrounding area. This is believed to occur for several reasons. One: timeworn, unwanted real estate has found a new life as a cannabis business in many parts of the country. This update leads to more foot traffic, which leads to other new businesses nearby. Two: many entrepreneurs are investing in cannabis real estate as it’s an asset that doesn’t depreciate over time. Three: new jobs increase residential home sales, as countless people prefer to live close to their employment.

It is generally understood the cannabis real estate sector got off to a slower start in 2021 because cannabis stocks were hot and financing was conducted almost exclusively with equity. In such a world, cannabis real estate companies had little need for capital raises due to slow business. This phenomenon all changed, however, once cannabis stocks peaked in February 2021. By the end of that same year, more than 90% of global cannabis financing had shifted to debt. This shift ushered a strong need for available properties, as well as guidance from real estate consulting by professionals for related businesses.

Cannabis Real Estate Services

Understanding the real estate market and actually obtaining a site to operate are two different beasts, and it’s often where cannabis real estate services are the most needed. In fact, legalization is only the beginning. Between jurisdiction rulings, zoning, taxes and community relations, a friend in the field like Canna Real Estate Group (CREG) is always a true asset. 

Need help understanding 280E? Wondering why so much cannabis real estate is listed as a separate entity? Are low-contact, drive thru properties a viable option? Canna Real Estate Group has the right answers for you.

How invested is CREG in the cannabis real estate sector? So much so that this past July, the company announced a call for real estate and property development projects for cannabis business licensees in emerging Northeast markets. One newcomer to this area is New Jersey, which now boasts approved medical and adult-use cannabis laws.

“This process is very much a public-private enterprise,” said Bill Betts, managing partner at Canna Real Estate Group. “We will see collaborative input and approval processes from town, borough, township, and state levels. So it’s in the best interests of our clients and their projects to work with team members who have experience working with cannabis real estate projects.” 

The first month of regulated cannabis sales in the Garden State reached $24 million, with 12 dispensaries averaging about $5 million in sales per week.

Real Estate Consulting Services for Cannabis Companies

Bridging the gap between interested parties are real estate consulting services for cannabis companies. Standing above all others is CREG, the premier service provider for cannabis real estate services, cannabis financial services, and cannabis architecture and construction throughout the United States. Their services span cannabis capital markets, development and consulting. Contact CREG for the best and most knowledgeable expert advice, and start exploring 420 real estate investing!

In 2020, New Jersey was one of five states in which residents voted to allow recreational cannabis, and adult-use cannabis sales officially began April 21, 2022. More than 12,000 customers lined up in the Garden State, buying nearly $2 million worth of recreational cannabis products on the first day of sales, according to the state Cannabis Regulatory Commission (CRC). From that first day until May 21, regulators said consumers purchased $24.2 million worth at the 12 dispensaries approved to sell adult-use cannabis. This sales amount is welcomed but is low compared to other states: Arizona reported $32 million in sales in the first full month with 73 facilities, and New Mexico sales reached nearly $40 million with at least 100 dispensaries.

In order to expand options and revenue, the CRC continues to issue licenses for medicinal and recreational cannabis businesses. A New Jersey cannabis business license is required for growing cannabis plants, storing cannabis and cannabis products, making cannabis products, transporting or delivering cannabis and cannabis products, selling cannabis and cannabis products, as well as testing cannabis and cannabis products.

New Jersey Cannabis Business License

There is not an established limit on the number of New Jersey cannabis business licenses available. By statute, however, the number of Class 1 Cultivators is to be held to 37 licenses until February 22, 2023. The CRC is currently accepting applications for recreational cannabis businesses in the categories of Class 1 Cultivators, Class 2 Manufacturers, Class 5 Retailers, and Testing Laboratories. The fee schedule allots for standard businesses as well as microbusinesses. New Jersey cannabis application fees range from $100 to $1,600, and licensing fees range from $1,000 to $50,000.

A unique aspect of this program is the mandated policy of prioritizing people with prior cannabis convictions when it comes to working legally within the industry. Priority status is set for others as well, including minority-, woman-, disabled-, and veteran-owned businesses, certified as such by the New Jersey Department of the Treasury, plus businesses owned by citizens located in an impact zone, a low-income area more impacted by the War on Drugs.

“Social equity businesses, diversely owned businesses, and impact zone businesses will be prioritized in the licensure process so that their [New Jersey cannabis] applications are reviewed before other applicants—regardless of when they apply,” the state’s website explains. “Applications from entities that meet criteria for more than one priority status will be reviewed, scored, and approved in accordance with the status of highest priority.”

New Jersey is not alone in taking social disparity into account when crafting new regulations and laws, as statistics have highlighted this issue for many, many years. For example, according to the ACLU, Black people are four times more likely than whites to be arrested for cannabis use, possession, and sale.

Education is part of the development process too. Hudson County Community College (HCCC) now offers cannabis-related coursework including an associate degree program and two certification programs. Additionally, the college is offering a four-week non-credit program concentrated on applying for and operating a cannabusiness in New Jersey. HCCC President Dr. Christopher Reber said in a statement the college “is dedicated to providing our diverse community with state-of-the-art programs that will lead to success and upward social and economic mobility.”

In an interview, cannabis attorney Jessica Gonzalez, who is involved with developing the college’s curriculum, noted that HCCC’s student body “is primarily Latino students, followed by Black students. It’s an important step for this institution to embrace cannabis to ensure that communities most harmed have access to cannabis education and are aware of the opportunities this industry brings,” she said.

Other cannabis programs within the state can be found at Stockton University, Rowan University, Raritan Valley Community College, and Bergen Community College.

How to Start a Cannabis Business in New Jersey

Ready to get into the industry? This are the basics on how to start a cannabis business in New Jersey:

• Familiarize yourself specifically with New Jersey cannabis license types
• Create a business plan
• Develop procedures
• Map out a budget and financial projections
• Build your team
• Obtain funding
• Secure property
• Complete the New Jersey cannabis application

Canna Real Estate Group specializes in commercial cannabis real estate and provides financial, architecture and construction consulting on how to start a cannabis business in New Jersey. With an established presence in New Jersey, we provide property acquisition, licensing submittals and municipal compliance services for our new cannabis clients there. If you have questions about the New Jersey cannabis license types or need assistance with your New Jersey cannabis application, we can help!

The Garden State is on a very strong growth path and we’re very much a part of it! Canna Real Estate Group can help you locate and secure qualified property for purchase or lease, and connect you with the right cannabis industry business and/or construction loan providers that fit your project’s needs. Let’s talk about your project!

The industry surrounding cannabis is not a flash in the pan. It continues to grow, and become less controversial, every day. According to the cannabis research firm Arcview, by 2027 cannabis is expected to be a $57 billion industry worldwide. Within the United States in 2021, $25 billion was spent on cannabis. Although some things about this business section are unique, every company has certain universal needs. One of these is a need for financial guidance for shrewd operation and profits.

Business Loans for Cannabis Industry

Cannabis industry business loans are available to those looking to begin or improve their place in the industry. Some examples of business loans for cannabis industry are use of private equity or capital stack, real estate financing (which secures commercial real estate to use as collateral for a company), invoice financing (to increase cash flow speed), purchase order financing via paying suppliers upfront, inventory financing through large quantity commitments, working capital loans, and sale-leaseback options. Further, some states have legislated social equity programs within their legalization laws. For example, when considering small business loans, cannabis companies should look into lending options in California, Illinois, Washington, Colorado, Massachusetts, Connecticut and New Jersey, or create a news alert for states which have recently begun to legalize to stay abreast on the topic.

Small Cannabis Business Start Up Loans

Traditional lenders are not often in this marketplace, so detailed research into small cannabis business start up loans is key. When comparing, look for fair and competitive pricing as compared to other cannabis business quotes, a simple application in understandable verbiage, easy payment options, and a commitment to continued customer service. All of these features will assist with minimizing loan-related frustrations. It is also typically best to avoid commission-driven lending brokers when searching for business loans for cannabis industry, as your best interests may not always be at the forefront. Additionally, carefully read and inquire about any potential hidden fees for processing and early repayment.

While the options for small cannabis business start up loans can be overwhelming, time and money carefully spent can be quite fruitful. Consider the city of Los Angeles, where cannabis companies have to secure a lease before they can get a license. Getting the lease can be challenging, but this requirement has created an opportunity for investors and lenders to work themselves into the flourishing trade. When armed with the right information, both business owners and landlords can boost their bottom line through intelligent financing.

“When putting together a hybrid capital stack the most important thing is to do your homework so you don’t waste everyone’s time,” according to Charles Adkins, founder of the real estate investment bank The Titan Group. Adkins has underwritten and placed more than $3 billion of complex capital structures over the past 16 years, mostly from private investors. “Even though private money and mezzanine equity are highly flexible, they also tend to stick to their niches. You have to know what your capital providers specialize in so that you pick one that will be comfortable in your specific deal. You may pay a higher rate or give up some control, possibly even allow them to be active in the investment, but if the deal makes sense you will end up with a ‘no lose’ situation.”

In a recent interview with Rob Sechrist, President of Pelorus Equity Group, cannabis was identified as one of the largest new asset classes in the U.S., a segment of real estate representing about $50 billion. This is due to industry popularity as well as the trend of cannabis properties generating up to 15 times more revenue than non-cannabis properties. Cannabis-use buildings require very specific infrastructure such as sensitive light and temperature regulation and specialty-use equipment, and therefore meticulous management of working capital is essential.

Those looking for real estate inspiration beyond warehouses, labs and dispensaries have found new territory in cannabis consumption lounges, which are becoming popular around the country in states that allow recreational adult use. One example in the United States is in Nevada, where less traditional venues such as massage studios, arcades, and comedy clubs are expanding their refreshment offerings. Lounges are anticipated to open on bustling corridors, both commercial and industrial, including near the famous Strip and in the downtown Arts District. Alaska, California, Illinois, Michigan, New Jersey, New York, and Pennsylvania also allow social consumption in designated areas.

Cannabis Industry Business Loans

With all of Canna Real Estate Group’s strategic capital source relationships, we have experienced insight to guide the way for our Clients’ optimized use of private equity, the exploration of capital stack stabilization and the efficient sequencing of structured debt solutions. Canna Real Estate Group can help you locate and secure qualified property for purchase or lease and connect you with the right cannabis industry business and/or construction loan providers that fit your project’s needs. We’d love to hear about your project. Let’s start a conversation!