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Landlords who rake in rents from medical marijuana dispensaries may put their commercial bank accounts and title insurance at risk, according to cannabis real estate experts.

Meanwhile, cannabis retailers are baking early termination clauses into leases in the event municipalities deny permits to open dispensaries.

Dan Dietz, manager of real estate acquisitions for GrowHealthy, a Florida medical marijuana company founded in 2014, said his firm retained SRS Realty Advisors, a commercial brokerage based in Orlando, to handle all of its real estate deals in Florida.

“The SRS brokers are well-versed on state regulations on dispensaries, as well as at convincing landlords to accept the risks associated with leasing to a retail cannabis shop,” Dietz said. “We have pretty tight lease clauses we include. There are termination provisions based on the inability to achieve government requirements to operate, and line items that acknowledge selling marijuana products is against federal law.”

Dietz, whose company operates three dispensaries in Florida, was a panelist for an Urban Land Institute discussion on cannabis real estate in Fort Lauderdale. He joined Matt Ginder, senior counsel with law firm Greenspoon Marder’s cannabis practice; Nick Hansen, Southeast U.S. government affairs director for MedMen, a national cannabis company based in Culver, City, California that is currently suing Miami Beach over its dispensary restrictions; and Tara Tedrow, a shareholder at Lowndes, Drosdick, Doster, Kantor & Reed who chairs the firm’s cannabis & controlled substances group.

Leasing to dispensaries is a risky proposition because banks and major insurance companies do not want to do business with anyone tied to the cannabis industry since marijuana is still a federally banned illicit narcotic, Tredow told attendees.

“For rent checks, that is a problem,” Tredow said. “If a bank knows you are receiving rent from a cannabis company those are illegal funds you are knowingly accepting. Most federally insured banks do not care if the dispensary tenant is a licensed medical marijuana provider complying with Florida law. The money is considered dirty even if it comes from a legit cannabis company. A real estate investor or a cannabis company seeking to buy new land may also find it difficult to get title insurance if insurers find out the property will be used for marijuana purposes.”

MedMen’s Hansen said the company retained Blake Wilder to handle leasing for several locations, including in Fort Lauderdale and Miami Beach.

“They have a pretty good working knowledge of what to look for,” Hansen said. “The biggest hurdle is time and the changing political winds in cities tackling dispensary regulations.”

In Miami Beach, Hansen claimed, permitting officials had given the company assurances it could open a location on Alton Road.

“After MedMen signed a 10-year lease and invested $1 million renovating a former Panera Bread restaurant, the city commission passed new regulations that prohibited its dispensary from being within 1,200 feet of another medical cannabis store that is already open,” Hansen said.

The company details the allegations in a recently filed lawsuit. Hansen said MedMen has had similar experiences in other cities and counties.

“That is not an outlier,” Hansen said. “That kind of stuff happens all the time, every day.”


Source: The Real Deal

A New York-based company has purchased a Central Florida pot operation for $43 million in cash and stock, amid expectations that the industry will explode following the voter-approved legalization of medical marijuana more than a year ago.

iAnthus Capital Management purchased the assets of GrowHealthy Holdings, a Lake Wales marijuana operator affiliated with McCrory’s Sunny Hill Nursery, except for the marijuana license. The transfer of ownership of the license is pending approval by the state Department of Health.

Under the deal, which involves the marijuana operator and its affiliated businesses, iAnthus is paying GrowHealthy $12.5 million for its Lake Wales real estate and 200,000-square-foot cultivation and processing facility. GrowHealthy, one of the state’s 13 licensed medical marijuana operators, will also receive $30 million worth of shares in iAnthus, which is traded on the Canadian Securities Exchange. iAnthus will also purchase the Lake Wales company’s $5 million bond, required by the state for all marijuana operators.

The New York company also owns marijuana operations in Massachusetts, Vermont, Colorado and New Mexico and has a pending acquisition in New York, according to iAnthus President Randy Maslow.

“Florida is really going to be our number one operation, in terms of size and everything else,” Maslow said.

GrowHealthy started distributing marijuana to patients via delivery in November but has not opened a retail dispensary.

According to a news release announcing the deal, the company is planning to open a dispensary in Palm Beach County later this year.

“As one of the largest states in the U.S. with a population of nearly 21 million people and favorable demographics, Florida and its medical cannabis market provide a tremendous opportunity for iAnthus and its shareholders. The state’s population includes a large percentage of older adults who can derive significant benefits from medical cannabis, and the Florida program has witnessed a rapid rise in its registered patient base since passage of the law,” Maslow said in the release.

Voters in November 2016 approved a constitutional amendment that broadly legalized medical marijuana and helped fuel a battle for a limited number of licenses. About 45,000 patients have received state-issued identification cards allowing them to purchase the marijuana treatment, but the number is expected to dramatically increase in coming years.


Source: WUSF News