Real estate often causes cannabusiness owners to spin their wheels. With short application windows and the need to have contingency plans in place, it’s easy to prolong your search for the right cannabis property.
But finding the right location for your cannabusiness doesn’t have to take forever. If you do it right, you can speed up the process and get to building your business faster. That said, a cannabis property must meet very specific zoning requirements and should thus be approached differently than other kinds of real estate.
To that end, we’ve developed an expedited process to help you find a cannabis property without getting blindsided by common real estate roadblocks.
Here’s our step-by-step process for finding your cannabis property more efficiently.
Start With the Green Zones
The first thing you need to know is how to choose the areas in which to look for your cannabis property. Many people do this by choosing a city, downloading a list of 1,000 or so properties in that city, and narrowing the list down to 100 properties from there.
But once they start going through those specific properties, they find that none of them actually qualify as cannabis properties because they aren’t zoned properly.
We created our green zone assessments for this very reason — because no one wants to settle on a location only to find out their cannabusiness isn’t legally allowed to operate there. Instead, our process starts with establishing where the facility you plan to operate is allowed to be, and then choosing from those locations.
Research the Requirements
Once you know where your cannabis property can legally exist, do your research to find out what requirements it will need to meet, with special attention to regional and municipal setbacks.
Usually, a city will determine setbacks based on how far the property is from a dispensary or how many dispensaries and cannabis facilities can be in a certain ZIP code or territory. But they’ll also dictate how far a facility must be from churches, day care centers, schools, and rehab facilities.
These kinds of facilities are constantly shutting down and opening up, but the city might only update their green zone map once per quarter — meaning the map can become inaccurate within a week.
At HYC, we use a number of systems and databases to create our own up-to-date green zone maps with all relevant setbacks factored in. From there, we search for addresses within those areas, giving us a narrowed list of addresses we then verify with the city to determine if they truly qualify to be used as cannabis properties.
Get Boots on the Ground
Once we have our narrowed list of potential properties, the next step is to get out there and physically scope out the area. Sometimes you’ll even find a cannabis property that isn’t in the system because it isn’t for sale or lease just yet.
Don’t be afraid to knock on the doors of qualified properties and ask about the company’s lease and when it expires. But be very targeted in which doors you knock on, otherwise you’ll be wasting your time.
Above all, you need to have a process. A lot of brokers make the mistake of thinking any property will work and end up whittling down the list of possibilities into locations that in fact won’t.
Protect Yourself From Real Estate Pitfalls
Even once you’ve found the property, you still need to be strategic as you negotiate with the landlord. Some landlords may try to charge more or create a bidding war once they find out you intend to use the space as a cannabis property.
Protect yourself when negotiating for a cannabis property with a contingency agreement, which keeps you from being bound to the property if your license application is denied. Contingency agreements can be difficult to negotiate because of the risk they pose to landlords, so you may have to explore creative solutions.
In some cases, you can put the landlord’s mind at ease by putting down a deposit or agreeing to a smaller monthly lease until your application is officially approved. You might even have to give up equity in your business to be able to lock down the property.
If you’re lucky, you might work with a developer who’s early in their career, has a bunch of properties, and is willing to roll the dice on your cannabis property while they get the others up and going.
Finding a Cannabis Property Doesn’t Have to Take Forever
Choosing your cannabis property can be one of the most difficult parts of opening up a cannabusiness, especially if you approach it like you would any other type of real estate. But with the right process and tools, you can minimize risks and choose your property efficiently.
To get expert guidance and a tried-and-tested process, contact HYC for a green zone assessment and to find the most lucrative cannabis property for your business.