Struggling Economy Signals Time for Cannabis Businesses to Seek Real Estate Deals
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(This is an abridged version of a story that appears in the August issue of Marijuana Business Magazine.)
The COVID-19 crisis and ensuing economic downturn have created opportunities for cannabis companies to finagle deals on real estate belonging to mainstream businesses or marijuana firms that are scaling back or even closing their doors.
Other cannabis companies are simply hoping their landlords will lower rents to fill vacant properties or to avoid losing existing marijuana tenants.
Marijuana businesses that are seeking to acquire properties owned by distressed companies must be quick to move on such opportunities, according to experts who spoke with Marijuana Business Magazine.And cannabis companies hoping to find relief on their rent payments or seeking to use their properties to raise capital need to look at potential legal and debt ramifications.
“You see many landlords currently providing rental payment deferment – perhaps even, in some cases, forgiveness options,” according to Garrett Graff, managing attorney at the Hoban Law Group in Colorado. “There’s a lot of flexibility being extended throughout the cannabis industry in general, and that includes within landlord-tenant relationships.”
“At some point down the road, as a derivative impact of the pandemic, we will see companies that are unable to continue operating,” he added, “and that will free up additional real estate to be purchased.”
Graff and other industry experts who spoke with Marijuana Business Magazine offered the following considerations for cannabis companies seeking to upgrade their real estate situation during the coronavirus crisis: