The first thing you need to do is sit down and set your goals because the Cannabis Commercial Realm is changing before our very eyes.  No other industry has seen the same growth as the Cannabis space which is still in its infancy. 

The Cannabis Industry has created a huge demand for Commercial space across the nation as legalization opens the door for business operations.  It’s for this reason why Cannabis statues and regulations are so closely tied to local Real Estate laws. 

Commercial Real Estate in the cannabis industry appears to be promising as legalization gathers momentum during election cycles. However, there are several considerations, requirements and restrictions that one must be aware of; in order to have this new multibillion dollar industry flourish in Real Estate.  Real Estate market reflects the principle of supply and demand that is enhanced by its uniqueness and immobility, both of which are reflected within the Cannabis space.

From a legal standpoint, having a license is required to operate storefronts, testing labs, cultivation, manufacturing, and also processing facilities.  There are some considerations to explore when determining what’s to come into the industry. First, it is important to weigh factors such as cash flow, tax implications, available financing, and getting a feel for the local real estate market. Next is to determine whether to rent or purchase a property. These are important considerations because determining to rent or own sometimes determines the trajectory of a related business.

Another consideration is the zoning restrictions that have been implemented to regulate the industry. Zoning ordinances are determined by our local municipality and county regulators, who want to avoid any cannabis related disruptions within their districts. In many jurisdictions it is common to see clustering of Cannabis related businesses that mitigate or limit certain operations. Yet, it is not uncommon to see de-clustering of businesses that spread out.  Contrary, it is common to see cannabis businesses required to be at a certain radius away from schools, daycares, and houses of worship.  It’s highly important to consult with local and state directives to determine zoning requirements, and to determine where a particular business could fit within a certain community.

In terms of where the industry goes from here, entrepreneurs may consider leasing or owning a property. There are certain factors to consider when choosing between the two options. With leasing, it is important to locate a cannabis-friendly landlord who can draft a lease that’s considerate of all parties involved.  It is also recommended to have an informed landlord and tenant relationship to consider the lease terms, risk mitigations and access to premises. Also, to have her consider default/remedy and indemnification/escape provisions. With purchase and sales considerations, one may need to pay close attention to financing, escrow and title insurance issues. These are important factors when determining a smooth transition between the buyer and seller.

Overall, Cannabis Real Estate Industry is developing.  We can see their growth of reaching almost $200 billion over the next 6 years as others become aware of its, medical and recreational benefits.


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