Navigating Cannabis Real Estate to Find Success

Higher Yields Consulting Navigating Cannabis Real Estate to Find Success

Green zones play an important role in cannabis real estate, which, in turn, plays an important role in winning a license. In fact, many states don’t even accept applications if real estate hasn’t already been secured. However, challenges exist with green zones that can make securing real estate difficult.

Higher Yields Consulting Navigating Cannabis Real Estate to Find Success

In addition to a lack of inventory in green zones, state and federal regulations present themselves as challenges, too. Although the road to success may seem rife with obstacles, it can be navigated with the right research and preparation.

Here’s how to overcome these challenges and find success with cannabis real estate.

The Weight of Federal Regulations

Despite being legal in most of the United States — and all of Mexico — federal legislation has yet to legalize cannabis. As a result, it remains illegal for any FDIC-insured bank to receive or process money that has anything to do with the cannabis industry.

Naturally, this makes life difficult for a cannabis real estate operator: If a property owner has any federally backed loans tied to a piece of property — as most do — they cannot lease to a cannabis operation. Their only option would be to sell, which would mean giving up a lucrative asset.

The Safe Banking Act Offers Relief

Luckily, the Safe Banking Act saves the day. Introduced by Rep. Ed Perlmutter of Colorado’s seventh District, this legislation loosens the government’s grip on cannabis-related finances. Broadly, the Safe Banking Act prohibits the government from punishing banks that work with legitimate cannabis operators.

Specifically, this bill allows:

  1. Institutions to provide general banking services to cannabusinesses.
  2. People and banks to sell affordable, federally backed loans to the cannabis industry.
  3. Cannabis real estate operators to lease their properties rather than be forced to sell.

The Safe Banking Act has opened new doors for operators as well as those in ancillary fields — in particular, cannabis real estate.

State Restrictions, Green Zones & Setbacks

Unfortunately, both the federal and state governments create challenges for cannabis real estate operators. For instance, space in green zones — areas in which cannabis operations can be legally located — is getting harder and harder to find. 

Further, cities continue to tighten regulations known as setbacks, which dictate the specific distances cannabis businesses must be located from facilities like schools, rehab centers, and day cares. Denver officials, for example, are adding fitness centers and public swimming pools to their list of setback regulations.

Recently, I worked with a client who had bought a medical-only dispensary attached to a cultivation facility with the goal of switching from medical-only to recreational. When the original owner had won the medical-only license, however, there were no setback restrictions in place for residential areas.

Higher Yields Consulting Navigating Cannabis Real Estate to Find Success

If we had kept the same medical-only license, the client would have been grandfathered into the property regardless of the new setbacks. Since we had to reapply for a recreational license, though, the new setbacks kicked in and we were forced to find a new location. 

The Promise of Emerging Cannabis Real Estate Markets

Although shrinking green zones prove to be both a nuisance and a challenge, new states offer opportunities. In particular, emerging states like New York, Massachusetts, Oklahoma, and New Jersey all have potential locations still up for sale.

These emerging markets present new opportunities for securing lucrative cannabis real estate. Doing so may give you a leg-up when the markets take off.

Moving Forward With Cannabis Real Estate

With all of the challenges, finding success with cannabis real estate can seem overwhelming, so we’re here to help. At Higher Yields Consulting, we find opportunities whether or not there’s supply because we create supply

We go out, knock on doors, and offer creative deals to property owners in green zones. This not only ensures the functionality of the industry but also builds generational wealth for property owners and their families.

Part of making the industry effective also involves tearing down the stigma that surrounds marijuana. By bringing the community together and giving back, we’re building a new, positive image for the cannabis industry.

Are you looking to secure real estate for your operation? Reach out today and get started!

How to Maximize Your Cannabis Yield: Floor Plans & Equipment Systems

How to Maximize Your Cannabis Yield: Floor Plans & Equipment Systems

Any cannabis operation — whether you’re cultivating extracting, infusing, packaging, or dispensing — has dozens of moving parts. A thorough planning process ensures a more efficient operation that can maximize your cannabis yield in terms of plants and profit. Professional planning to make the best use of your space can help guarantee that your cannabis operation runs efficiently. We’ve got a few tips to help your business bring in the best return per square foot.

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How to Maximize Your Cannabis Yield: Commercial Real Estate — Part 2

How to Maximize Your Cannabis Yield: Commercial Real Estate — Part 2

Choosing the best available property for your cannabis business is no small task. Will you build your own facility or adapt an existing building for your use? Is it better to lease or purchase? There are endless decisions to make when considering how to maximize your cannabis yield. Before you sign on the dotted line, we have some tips to help you choose a property wisely.

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How to Maximize Your Cannabis Yield: Commercial Real Estate — Part 1

california cannabis consultants

When selecting a property for your cannabis business, you want to be certain your investment aligns with your goals. At the outset, it’s important to think about how to maximize your cannabis yield in terms of production and financial return regardless of the vertical in which you choose to operate. Whether you’re thinking of buying, leasing, or doing a custom build, we have some tips on what to look for in a piece of commercial real estate — and some pitfalls to avoid.

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Cannabis Real Estate: Deals Depend on Timing, People & Politics

cannabis real estate

When it comes to finding a home for your cannabis operation, you may be challenged by zoning regulations, competition, and a looming deadline. Some cities and states require you to provide proof you’ve already secured compliant cannabis real estate as one of many rigorous criteria to apply for a license. We have some tips for finding and securing cannabis real estate, even in a tight market.

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Choosing the Right Marijuana Property for Your Cannabis Business

Choosing the Right Marijuana Property for Your Cannabis Business

There’s a lot the cannabis industry has working against it – like sophomoric legislation, gray legal areas, and closed-minded banking partners – but one of the most overlooked factors is real estate. Finding the perfect marijuana property for your budding business is no small feat, and there are far more factors than most business owners realize. From key decisions such as “To buy or to lease?” to “To vertically integrate or niche down?” the nuances of securing success start in the earliest days of building your business. Here’s what you need to know as you’re scouting out your business’s new home.

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5 Tips For Finding Cannabis Real Estate


5 Tips For Finding Cannabis Real Estate

You’ve decided to open a cannabis business, but first thing is first. You need a piece of real estate to operate on.

Finding the perfect piece of real estate is usually the first step in applying for a cannabis business license, whether it is for a dispensary, a cultivation operation, an extraction lab, a consumption lounge or a distribution headquarters. No matter what aspect of the cannabis space you hope to work in, your property choices will be a huge factor in the success of your application – and your eventual business. Planning ahead to make the right choices on property can be the difference between colossal failure and a thriving business.

Commercial Cannabis Real Estate Properties – Where to Start?

Not sure where to start? You aren’t the only one. But don’t worry. John Valdez, Higher Yield Consulting’s top real estate broker and VP, is here to help with our best tips for finding the right cannabis real estate for you. Read on to learn how to find your ideal property and set your cannabis business up for success:

1. Location, Location, Location is Paramount When It Comes To Commercial Marijuana Real Estate

The old saying about what’s most important in real estate “location, location, location” applies to cannabis as much as anything else. When you are choosing where to operate your business “the main thing is your location” explains Valdez.

Still, the considerations about location might differ depending on your business type. So think about what your business will need to thrive. For example, Valdez suggests that “if you are doing a cultivation facility, you want to build that close to transportation, where you can get your product out the door soon as you can.” On the other hand, Valdez says that “if you’re doing a dispensary, you want to make sure that you have good foot traffic, because you want a location where you’re clients are able to get to you easily.”

Your location will have a big impact on what you can really do with your business so make sure you find the right place to launch – with everything your business needs to succeed.

2. Learn the Local Cannabis Business and Real Estate Regulations

As you consider location, you should also learn about the local regulations for cannabis businesses in that area. It’s no good finding your perfect piece of real estate only to realize that it doesn’t have the right zoning for your business type. And these local regulations can be much more complicated than just zoning.

“Zoning is a key thing,” explains Valdez “but you want to make sure that the municipality is allowing that type of use.” There are so many aspects to these regulations, it can be easy to overlook something. “I’ve been working with consumption clubs lately” Valdez offers as an example, “and in Colorado setbacks are different for consumption clubs than they are for a dispensary.” Tiny errors on calculations for things like setbacks can be the difference between buying a usable or unusable property. So make sure you have experts on your team who can delve into the local laws and understand what you need.

3. Find a Broker and Cannabis Real Estate Team You Can Rely On

When it comes to your real estate broker, make sure you find someone who you can trust to navigate the complicated task of finding your property. “A broker that’s in the cannabis industry is crucial to having a successful closing and start up to your company” explains Valdez. “If you have somebody that doesn’t know what they’re doing, you can tie your project up for a long time before you even start that application.”

For this reason, Valdez says “one of the biggest things that I would recommend to you when you’re looking at real estate for cannabis is hiring a professional, not only a professional broker but hiring a professional team.”

Cannabis specific real estate brokers understand the rules and regulations involved in using a property for cannabis and they already have contacts in the space. This is needed for finding the right property. Still this knowledge could be strengthened with the help of a good consultant. “Brokers should have a general idea of what the local restrictions are going to be, but having a consultant to verify it is also going to be key” says Valdez.

In addition to your broker and consultant, a good design expert is also a crucial member of the team. They can help assess what improvements might be needed to make a property functional, so you can make an informed purchase.

4. Pay Attention to Available Services

When considering a property, you should also look at the services available. Depending on your business, you may need particular services like access to enough electricity to power an indoor grow, or good internet access for a business headquarters. Whatever your service needs, you may want to find a property that already meets them. “What kind of service is on the property?” asks Valdez “Because your electrical service, your heating, your air conditioning service, those are things that you want to take a look at because those are high dollar items.”

You might plan to just upgrade your services when you move in, but in some areas upgrades aren’t possible or are extremely expensive. It’s best to plan and budget all of this before you make the final purchase. The last thing you want is to buy a property that you can’t make work.

5. Consider Retrofitting a Potential Cannabis Property Carefully

This brings us to the last tip – consider retrofitting carefully. When you are deciding whether to build a new building, retrofit an old one, or just find a property that already has what you need, it might seem like retrofitting is the cost saving option. But that’s not always the case – so a cost/benefit analysis is key for this decision. “For retro-fitting you want to make sure to see what you’re going to be able to salvage and what the build is going to be on it” explains Valdez.

To figure this out you need to know how much are you going to have to spend on the build out for a retrofit or renovation on the property. “Sometimes you can look at it and say, ‘hey, it’s going to cost us an extra $800,000 to build this out.’ Let’s take a look at building a facility from dirt.”

Before buying your property, think carefully about what kind of site improvements will be required. When these improvements are ignored, something as simple as a sprinkler system could add hundreds of thousands of dollars to your costs.

The Importance Of Commercial Cannabis Real Estate

Those are our best tips for finding your perfect property, but they just brush the surface of this complicated process. If you are still feeling confused on how to proceed, Higher Yields Cannabis Consulting can help. Our knowledgeable consultants have helped cannabis businesses in over 30 states to find the right property and successfully launch. We can help your business navigate the process as well. 

Schedule a Consultation
Whether you already own a cannabusiness or want to get into the business we can help.

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Higher Yields Cannabis Consulting

Higher Yields Cannabis Consulting

Higher Yields Consulting is a Marijuana Consulting Group comprised of industry experts with decades of combined experience in the legal industry. Whether you are looking to get into the business or already have a license we can help your business succeed. Call (844) HI-YIELD to schedule an initial consultation.