MJBizMag November-December 2021 - 76

Avoiding
Eviction
Real estate experts recommend cannabis companies be transparent about their businesses with potential landlords, even writing the nature of their
enterprise into the lease.
I
n most states where marijuana
is legal, the license to operate a
cannabis business is tied to the real
estate where it's located, making it
critical for companies to maintain good
relationships with their landlords.
" Being evicted is a death sentence for a
cannabis business, " said Cara Thornton,
a partner with Denver-based legal
firm Fortis Law Partners. " You have a
customer base, you have your facilities
and the tenant improvements you've
made. You can't just resell everything on
Craigslist or eBay. "
The good news is that cannabis
businesses are treated like any other
company that enters into a lease
agreement with a property owner, and
landlords can't evict them if they comply
with the state's marijuana laws and have
upheld the terms of the lease.
Mainstream retailers' rent often is based
on a percentage of sales, but that formula
does not work for cannabis businesses
because landlords can't accept a percentage
of sales from the marijuana business,
Thornton said. Protections that should be
written into a lease include a provision that
if the tenant complies with state and local
laws, there is no basis for eviction.
Cannabis companies should be
transparent with potential landlords
about the type of business they will
be operating on the premises. A lease
should include language that provides a
tenant an option to terminate the lease
if a business license is revoked or not
renewed, Thornton said.
76 MJBizMagazine | November-December 2021
Marijuana businesses are treated like
mainstream companies when it comes
to leasing property. Those that comply
with state laws governing the cannabis
industry and abide by the terms
of their leases cannot be evicted.
Even so, there are measures those
companies should take to ensure
they're protected, including:
* Maintain good communication with
the landlord and pay rent on time.
* Keep your cannabis business license
current and in good standing.
* Hire a good real estate attorney to
review your lease and make sure
you have the opportunity to renew.

MJBizMag November-December 2021

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