MJBizMag November-December 2021 - 80

Avoiding
Eviction
Unlike traditional commercial real estate, landlords cannot wander unescorted through cultivation sites. Photo by Mark Blinch
Joe Caltabiano, CEO and director at
Choice Consolidation Corp., said the
best thing cannabis companies can do
to avoid issues with their landlords is to
hire a competent real estate attorney.
" People in cannabis try to do things
in-house or have a friend do it, " he said.
" Surround yourself with professionals
that understand all the nuances as they
relate to real estate. "
It's also important to communicate
regularly with your landlord-especially
if things aren't going well. Landlords
generally don't want to evict tenants,
because it costs them time and money
in legal fees, Caltabiano said.
" Most are very willing to work with
tenants if there is constant dialogue
and some ability to pay, " he said. " What
frustrates a landlord is someone not
willing to pay their rent and then pull
up in a Range Rover and say they don't
have the money. "
Even if a landlord sells the property,
the tenants cannot be evicted, said Rob
Sechrist, president of Newport Beach,
California-based Pelorus Equity Group,
which provides financing to cannabis
companies.
" You can't evict a tenant unless he
breaks the terms of that lease for No. 1,
not making the payment, or No. 2, not
being compliant in the covenants of the
lease, " Sechrist said. " If the tenant loses the
license with the state cannabis board, that
is an immediate breaking of the lease and
we can evict them. "
FEWER PROTECTIONS
While cannabis businesses must be
treated like any other tenant, they don't
80 MJBizMagazine | November-December 2021
Tom
Downey
have the full protections that mainstream
businesses enjoy because of the industry's
federally illegal status, said Tom Downey,
a regulatory attorney and shareholder at
Denver law firm Ireland Stapleton.
" It's the same as any other business, "
Downey said. " As long as there is a
legalized marijuana structure in the state,
they don't treat marijuana differently
than any other business. "
Landlords face their own set of
challenges when leasing to marijuana
businesses. First, because marijuana is so
highly regulated, building owners cannot
just show up at a cannabis company to
inspect the premises. They first must
present identification and get buzzed
into the sales area. They are not permitted
behind the counter and, unless they
have authority from the state, they can't
wander unescorted where the plants are
grown, Downey said.
" Normally, a landlord can go on the
premises and make sure everything is
OK, " he said. " With a cannabis tenant,
you have to make an appointment and be
escorted around. "

MJBizMag November-December 2021

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