The rapid growth in the Cannabis industry has presented unique challenges which continue to affect the smooth and efficient running of the business. One area that has faced serious challenges in the Cannabis business and industry is real estate.
Property Requirements in the Cannabis Industry
Cannabis and has been subjected to various legislation in America many of which have resulted in the legalization of the substance or its products in some states. As a result, serious investors have moved in seeking to invest in the legalized Cannabis products in America and specifically in states where the use of Cannabis is permissible for medical and recreational use.
While this is the case, investing in the American Cannabis industry has comes with some challenges of its own. For instance, the real estate issues faced in this sector makes investing in it somehow challenging. Finding the best property for Cannabis business is not as easy as it might seem. Each state in America has its own rules and regulations regarding the cannabis business.
Real Estate and Cannabis Legal Framework
One of the biggest contributors in variations in Cannabis and real estate is the legal framework surrounding the industry. Depending on the governing state regulatory framework, municipalities in America have the liberty of opting out of allowing cannabis businesses to operate.
This allowance in law in turn creates a host of laws and regulations which vary significantly from one state to the other. Rollouts uncertainties in this area results in real estate negotiations ambiguity considering that local real estate agents do not have the required experience to navigate this complicated landscape.
Zoning and Land Use
Zoning laws and regulations in America play a very crucial of determining the right locations for Cannabis businesses in America. Cannabis zoning and land use regulations are domiciled at the state level. The laws dictate that Cannabis businesses should be located a certain prescribed distance from areas considered sensitive like schools, hospitals, churches and residential areas.
At the local levels, cities may impose further restrictions on the Cannabis business to certain neighbourhoods and areas especially on the town outskirts. The limited availability of suitable properties created by this rules and regulations which has in turn occasioned a scarcity in the supply of real estate for the Cannabis businesses.
Cannabis Real Estate High Demand
The Cannabis state zoning regulations have occasioned a real estate scarcity for this business. This is so because of the high number of people vying for the same limited properties in certain locations in towns and other areas.
As a direct consequence, landlords and other property owners have taken advantage of this to impose higher rent and lease on the few available properties available in the market for Cannabis business use. This high rent has made it difficult for Cannabis businesses to find a suitable area of operation that is affordable and easily accessible. Â As such, many cannabis businesses still struggle despite legalization in some states.
Conclusion
As a potential investor in the Cannabis business, you need to understand the inner details of Real Estate and Cannabis. Understand how the zoning regulations in this space affect the ease of cannabis business and the potential success from it.
