Finding a suitable location and obtaining site control for your cannabis operation is a daunting prospect: local restrictions and zoning laws drastically limit the permissible locations, and as a result, owners of suitable properties are seeking incredibly aggressive deal terms. Knowing how your cannabis use will complicate your negotiations will help you end up with the best lease terms possible.

License Considerations

Depending on your licensing strategy, you may want to structure your deal as an option to lease or a contingent lease which only takes effect if you become licensed. You can ask for an extended entitlement period to lock down the space while you seek your license in exchange for making payments to the landlord (these can be upfront, monthly, or along another negotiated timeline). Under this structure, until you get your license you do not actually move in or perform any possessory obligations such as insuring and maintaining the premises, saving you a lot of money during the most uncertain period of this process. Require the landlord to cooperate with you during the licensing process, including by providing information to regulators and, if need be, amending the lease as they may require. Ask for a right to terminate the lease in the event the license application fails or if the license is revoked without any fault of the tenant.

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