MJBizMag February 2023 - 38

Zoned Properties leases cannabis-focused
commercial real estate. Courtesy images
Between a Rock and a Hard Place
Marijuana companies seeking real estate
face limited choice and premium prices
By Omar Sacirbey
E
xperienced cannabis
entrepreneurs know that
ancillary companies such as
construction and banking providers
often charge marijuana businesses
more than their non-plant-touching
counterparts-the so-called " green tax. "
The green tax applies to real estate,
too. Marijuana businesses regularly
pay premiums for properties, whether
they are retail storefronts, land
or warehouses for cultivation and
manufacturing.
" Yes, there is a cannabis premium, "
said Berekk Blackwell, the chief
operating officer at Scottsdale, Arizonabased
Zoned Properties, a cannabisfocused
commercial real estate leasing
and investment company.
That premium, Blackwell and other
cannabis industry observers say, has
a few main drivers that most other
industries don't have to contend
38 February 2023 | MJBizMagazine
with-at least not to the same degree as
marijuana businesses.
These drivers include:
* Restrictive land-use and zoning
regulations.
* Holding fees that cannabis
business owners pay landlords to
keep property vacant until they
receive business licenses as well as
other contingency fees.
* Landlords and property sellers
who perceive cannabis businesses
as cash cows that can afford to pay
premiums-especially because of
limited availability.
* Landlords who perceive that
renting to cannabis businesses
puts their own land deeds,
mortgages and bank notes at risk.
" The reasons are a little bit of
everything. It really comes down to
supply and demand, " said Chris Cox,
principal with BeGreenLegal, a cannabis
consulting firm in Sacramento,
California. " The starting point is, if
you've ever tried to get a land-use
permit for cannabis, you'll know that
it's pretty difficult compared to just
locating any business. There are many
requirements starting at the state level. "
The good news is that in more
mature markets, real estate prices for
cannabis businesses are softening, and
there are strategies to minimize premiums
in newer, still-evolving markets.
Chris
Cox

MJBizMag February 2023

Table of Contents for the Digital Edition of MJBizMag February 2023

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