Things to remember when creating your cannabis lease agreement.
When you are creating a lease agreement for your cannabis business, it’s important to understand how different these commercial leases are from standard business leases. Fortunately, we at California Commercial Realty Advisors can offer you some suggestions to ensure that your cannabis lease agreement sets your business up for long-term success. Here’s what you need to know.
Investigate the Landlord
Before entering a cannabis lease agreement, it’s important to be diligent and investigate your landlord. For instance, use public records to investigate your landlord’s financial background and ensure that the landlord has full rights to the property. You should also consult with a real estate attorney to make sure that the corporation is in good legal and regulatory standing.
Secure Full Disclosure in Your Agreement
When writing up your agreement, make sure that your landlord is completely aware of their legal obligations and responsibilities. In your agreement, avoid using vague or general language, such as “horticulture” or “medical services.” Your lease agreement needs to specifically address that you will be using the space for cannabis cultivation, processing, or distribution. If your agreement does not include this disclosure, your business will have trouble securing or renewing licenses in the future.
Negotiate Flexible Lease Terms
You should also make sure that your lease agreement offers the option to purchase the property at the end of your lease term. This way, if the property increases in value, you will not have to worry about having to relocate your business. Additionally, try to negotiate the right of first refusal, so you then have time to work with real estate agents to determine a fair market price for the space.
These are some of the steps you should take when creating a cannabis lease agreement. Do you have additional questions regarding your business’s lease or your commercial or industrial real estate needs in general? If so, contact the team at California Commercial Realty Advisors, Inc. Our dedicated team is ready to assist you today.
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