Cannabis Companies Are Paying a Premium to Secure Space

Cannabis businesses are paying a premium for real estate. While several states have moved to legalize cannabis use, the absence of federal legalization has created heightened operational risks for these businesses. To offset those risks, real estate owners are securing above market rents and including contingencies in leasing agreements.

While challenges securing capital is the most common reason for landlords to increase the rent premium, licensing problems are another common challenge. “As cannabis real estate brokers, all of the deals that we work on have some sort of contingency needed to make sure that the business is properly licensed and is operational,” Matte Namer, founder and CEO of Cannabeta Realty, tells GlobeSt.com. “There could be some additional risk for that landlord to strike a deal with the cannabis business if the tenant is then not able to get a license for that location.”