Cannabis Real Estate

Cannabis Real Estate

Marijuana for medical and recreational purposes has skyrocketed in recent years. Despite the plant’s status as a Schedule I substance under federal law, the legal marijuana business in the United States was valued at $13.6 billion in 2019, according to New Frontier Data, with 340,000 employees dedicated to plant handling.

According to Grand View Research, the worldwide legal marijuana sector is estimated to reach USD 70.6 billion by 2028.

Even though many people have rushed into the marijuana sector, not everyone has the financial means to succeed. Some people have the time and money but lack the necessary real estate. On the other side, some people may own property yet lack the financial resources to launch a business. This is when the professionals’ experience comes into play.

What is the importance of cannabis real estate?

Cannabis is already legal in a number of states, and the market is rapidly growing. Retailers, distributors, manufacturers, and growers will all require a place to operate. Cities have designated zoning for cannabis businesses inside their boundaries. To know what their land may be used for, land and property owners must understand how their land is designated. This is especially important for those who want to sell or rent their cannabis property since its value is defined by its prospective applications.

Because cannabis properties are currently in such great demand, many once abandoned and unsightly residences have been transformed into highly profitable business possibilities. Because there are so many rules and regulations governing the acquisition, development, licensing, and other aspects of cannabis real estate, it is strongly suggested that you contact with a cannabis real estate professional.

Leasing or buying?

Often, cannabis entrepreneurs will have to face the question of whether it would be better to lease or to buy cannabis real estate. Most states accept both for the issuance of a cannabis license. Here are some pros and cons to answer the question of “should I lease or buy”?

  • Buying:
    • Pros:
      • Wealth building.
      • You secure the value of the property in case the business fails.
      • Tax breaks.
      • You can rent the unused space.
    • Cons:
      • Expensive.
      • Highly depends on budget.
      • Takes more time to get started.
    • Leasing:
      • Pros:
        • Cheap(er).
        • Easier to get a good location.
        • You’re able to negotiate with your landlord.
      • Cons:
        • If the business fails, you will most likely be left with nothing.
        • There’s a limited market for leasing a green zone property.
        • You might be subject to a rent increase.

RELATED: How a Dispensary Financial Model Can Help Grow Your Cannabis Business

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tom

tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.
tom

tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.

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