Stepping into the cannabis industry can be daunting: every legal state is home to a separate set of laws and regulations, and entrepreneurs face different challenges working to secure cannabis financial services or cannabis commercial real estate than in other industries. In cannabis, geography isn’t the industry’s only limitation — most banking services aren’t available to the cannabis industry. Because of this, standard processes for securing loans and investors are unavailable to new cannabis businesses. With the added financial stress of high tax rates, these issues have the potential to significantly impact businesses’ net profits and create a substantial amount of risk for business owners and contractors. Worse still, since cannabis is still listed as a Schedule 1 drug, it’s federally illegal status prevents some landlords from renting to cannabis businesses, an added obstacle.
The good news, however, is that a growing group of professionals, including in cannabis commercial real estate, specialize in serving the cannabis industry and can help emerging cannabis businesses. Rather than gritting your teeth through rigorous processes, it’s often best to leave projects to professionals who have honed their expertise after years working within the cannabis industry. But with all of the risk involved, how do you know which professionals are right for you?
That’s where Canna Real Estate Group comes in. We’re a consulting firm that specializes in commercial and residential real estate, and can provide cannabis real estate financing services, architectural, and construction consulting for cannabis businesses looking to work with experienced specialists. We always recommend finding the right people to work for you and your business, and since step one includes finding a property to house your business, finding a cannabis real estate professional is of the utmost importance. There are tons of reasons why working with a seasoned professional will benefit your business, but for now, let’s cover the top 3 reasons to work with a cannabis real estate professional:
Renting a property means that you will not be tied to a specific location. It’s no secret that state-regulated cannabis markets see frequent regulatory changes, and sometimes these changes could affect where a business is allowed to operate, or what types of buildings you can occupy.
Not only will hiring a professional real estate consultant alleviate the burden of familiarizing with a laundry list of regulations, they’ll also ensure that a lawyer reviews a lease before you sign it, and will make sure that the landlord understands the nature of your business model before you become a tenant. A real estate consultant can also help create a backup plan, should your landlord refuse to renew your lease or raise your rent unreasonably. If regulations shift, your backup plan will determine how smoothly an unexpected transition will go.
There are other advantages to owning the property where your business will operate. Owning a property alleviates concerns surrounding whether a landlord will renew your lease or raise rent. Ownership also increases privacy, and keeps an asset on your books rather than a potential liability.
Owning a commercial property comes with a lot of additional responsibility, however, and raises new potential problems. Does your property have room to grow as the business scales, and the costs associated with said scaling? Also, if you should have to move your business, will your property be easy to sell?
Unless you have extensive commercial real estate experience, working with a cannabis-focused specialist is the best way to ensure that you’ll navigate this process successfully.
Every state has a regulatory body that determines what constitutes cannabis friendly real estate. This list typically includes restrictions, or caps, that municipalities have placed on the number of licenses in any given location.
There’s only a certain number of licenses that are granted under the available types of marijuana licenses in every state, county, or township. Furthermore, determining which municipalities have opted-in is the best place to start searching for cannabis friendly real estate.
The next step is to find property that’s for sale or rent within your chosen municipality. Most online listings state whether the property is in a “green zone”; zones where marijuana facilities can operate, but not always. Sometimes you’ll need to call the municipality to retrieve a copy of their marijuana business ordinances, and you should review the municipality’s zoning map to see the property’s zoning classification. Due to the abundance of red tape involved in securing a cannabis-friendly property, you may need to hire an attorney that knows cannabis municipal and zoning requirements before purchasing or leasing property. This is where hiring a cannabis real estate professional can save your business time, headaches, and (most of all) money.
Hiring a cannabis real estate professional goes far beyond simply finding a property. Due to the highly regulated and precarious nature of the cannabis industry, it’s not a matter of if, but when, you might need an attorney with cannabis experience, an architect familiar with cannabis build-outs, cannabis financial services, and more.
When working with a cannabis consulting firm like Canna Real Estate Group, you’re getting top of the line assistance within all of the necessary avenues to start or expand your cannabis business. Whether it’s complete builds, renovations, cannabis commercial financing to source loans or secure funding, or simply getting trusted advice, we’re here to help you create your dream cannabis business.