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Regulations in Cannabis Real Estate

Regulations in Cannabis Real Estate

Cities and states all have conflicting rules on real estate, business licensing, and regulation of sales, but no other industry combines red tape like the cannabis business. As cannabis is legalized in one capacity or another in more and more states, regulations are easing up but not to the degree that cannabis companies would like. It's important to be aware of your local regulations regarding cannabis real estate, where and how you can sell, and what taxes look like on your products.

Let's take a look at the most common regulations that surround the cannabis business as they pertain to real estate selection. Hopefully this will help you pick the best place and stay within your local jurisdiction, making the most sales, and generally enjoying what is one of the best businesses currently around.

Types of cannabis real estate

There are so many businesses involved with cannabis, from growing and harvesting to sales, research, manufacturing, edibles, and cafes. Each has different requirements, regulations, rules, ordinances, and other redcannabis real estate tape you have to dance around in order to legally open your business. Legal cannabis—even recreationally legal—doesn't mean you can just open a store at the corner selling lemonade and brownies.

For instance, you need licenses for:

  • Dispensaries: medical and recreational (often both are in the same place)
  • Processing, manufacturing, and packaging for shipment
  • Research
  • Cafes or other places that serve food or drink either that include cannabis in their preparation or allow patrons to imbibe cannabis on the premises
  • Agriculture, whether outdoor or indoor

These are the most common real estate types in reference to cannabis, and each has its own piece of legislation and regulation. You need to determine first what type of business you want to go into; even if you're buying space to grow cannabis, you might not be able to sell it legally without more licensing or zoning. Often you cannot sell where you manufacture, as well, so you have to be very aware of the local laws regarding cannabis businesses.

Zoning restrictions

Cannabis businesses are often required to be certain distances from specific buildings, often including school or areas that are residentially zoned. Because of the unfortunate stigma that cannabis still carries in many places, residential neighborhoods—even if partially zoned for commerce—might push back against alcohol and cannabis businesses. The absolute most important step, after determining what you want your business to do, is finding a place where you can do that most lucratively. You don't want to open a dispensary that's in a rural area with no other businesses around. While people will drive to you, your business will suffer far more than if it were near other companies that organically draw in traffic.

Many places also require cannabis businesses to be a certain distance from each other. This means you need to get into it while the getting's good, or you'll be fighting other business owners for prime real estate.

Other considerations

If you're not looking to buy land or property for your business, renting is the next logical step, but not all landowners are willing to rent or lease to a cannabis business. Finding someone who is willing to rent to you requires careful planning and demonstrating that you are a legitimate business.

cannabis real estate

Getting all of your business affairs in order should be your first step, and then present this to a potential landlord, letting them know the ins-and-outs of what they can expect. Many landlords expect cannabis traffic to look like shady people, but if you can demonstrate that you're simply a business with normal clientele, they are far more likely to rent to you.

Showing a lender that you've scoped out a place and gotten approval is another step towards increasing the likelihood of your approval for financing as well. The more you can present a solid case that you've done your business homework, worked through finances and have plans in place to succeed, the better your chances of getting the loans you need.

 

Do your homework!

Find out how your city, county, and state laws interact in regards to purchasing or renting land for cannabis business. Specifically, make sure you understand how they relate to exactly what your business plans to do—cannabis zoning and regulation is different for manufacturing, growing, shipping, and serving to customers. You must also be aware of where your business can be in relation to surrounding neighborhoods, schools, and other businesses.

Get everything together and present your case to a potential landlord and then to your ideal lender. If you have everything in order and you sell yourself well, you should find your business goes from dream to reality!

Related:

Top 5 Reasons to Invest in Cannabis Real Estate

How Do I Get Funding To Buy Cannabis Real Estate?

How Marijuana Legalization May Influence Cannabis Real Estate Funding



Posted by Canna Business Team


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In an industry that is constantly evolving, Canna Business Financing provides business owners with a reliable source to gather the most up-to-date information. From resources to fund the growth of your business to insights on best practices to scale, look no further!

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