Marijuana Business Magazine - March 2018

U .S. Attorney General Jeff Sessions has made it even more difficult for marijuana entrepreneurs to find a rental property for their businesses. That means cannabis business owners will have to do even more hand-holding and educating when it comes to dealing with landlords in the post-Cole Memo era. And they may need to seek out smaller landlords – and be more flexible about rental terms. Before Sessions tore up the Cole Memo, it already was tough for mari- juana business owners to find a rental space. Zoning restrictions reduced the amount of rentable properties. Also, most landlords didn’t want marijuana tenants because they feared that govern- ment authorities could take legal action against them – or their property. Spooked by Sessions According to marijuana industry participants, the Sessions decision has scared even more landlords away from cannabis, complicating the lives of MJ entrepreneurs in search of a home for their business. Justin Galindo, a California commer- cial real estate agent for 420Properties. com – a real estate service that helps cannabis entrepreneurs find properties – determined that for every dozen prop- erties zoned for cannabis, only one or two landlords were willing to rent those spaces to cannabis businesses. And that was before the Cole Memo news. Now the pickings are even slimmer. “A lot more people are waiting to see what happens.They’re nervous that it’s a possibility that the federal government can come in and cause problems for them,” Galindo said of landlords. It’s also driven up rental prices for marijuana businesses. Landlords who are willing to rent to marijuana busi- nesses know how rare that is and how they can raise prices, Galindo said. He estimates that marijuana properties that previously went for $4-$5 per square foot will now go for double that. Darren Weiss – an attorney for Mary- land infused product company Verano Brands who has clients in multiple states By Omar Sacirbey Cannabis business owners will have to be even more diligent about wooing landlords panicked by the Cole Memo decision PROPERTY SQUEEZE REAL ESTATE The New Normal Jason Galindo is a commercial real estate agent in California. – has spoken with 10-15 landlords who are now nervous about renting to his can- nabis clients.Weiss was able to allay the concerns of about half those landlords. “The hysteria surrounding this has had a negative expense on my business, especially in relation to landlords that have gotten spooked by this,”Weiss said. “More landlords are saying: ‘It’s not worth it to me – even if I can com- mand a higher rent or sales price for my property – if there is a threat of the feds cracking down.’” 66 • Marijuana Business Magazine • March 2018