Orange County (CA that is) has historically been known as ‘the conservative suburb south of Los Angeles’, evoking images of sprawling housing tracks, miles of beaches…and lately, amazing snow capped mountain views from Newport Beach!  A closer look into Orange County demographics will reveal a far more diverse population than most people across the country realize.  And that’s starting to play out with increasing openness to the cannabis industry…along with the need by many Orange County cities for additional tax revenues after the pandemic.

As the cannabis industry ‘self corrects’ (eliminating operators with limited business acumen and no capital reserves) and the cannabis consumer becomes more discerning (like the craft beer consumer) real estate owners will also have to become more educated to consumer trends and viable business plans within the cannabis space.  Gone are the days of locating a cannabis user, securing rents FAR over market and watching the cannabis tenant (AND property owner) print money.  The graph is pushing back.  Owners need to deep dive into a potential cannabis tenant’s history, capital sources, investors, management structure, product viability, and so much more.

Santa Ana has been locked into the cannabis industry for several years, welcoming all segments, and making many commercial real estate Owners very happy with the high amount of capital improvements invested into buildings.  We know Costa Mesa recently approved Measure Q, the Retail Cannabis Tax and Regulation Measure. This measure allows Costa Mesa to adopt rules permitting retail cannabis uses within the City, including storefronts (dispensaries) and non-storefront uses (delivery only).  Wheel are in motion for several new dispensary locations across Costa Mesa…from former Conroy’s locations to spots along Harbor Blvd.

Who’s next in Orange County to adopt measures allowing for retail cannabis dispensaries, and even cultivation, manufacturing & delivery uses?  Huntington Beach?  Hopefully.  The City is currently going through review and studies for the new City Council to make policy decisions, which will be passed along to the Planning Commission.  And it makes so much sense for Huntington Beach to allow cannabis…from both a tax generating standpoint and re-positioning of older outdated properties.

At CCRA, Inc we have experience assisting both Owners with approved cannabis properties and cannabis tenants needing to secure space.  The cannabis real estate transaction has many potential pitfalls that need to be properly understood.  A long timeframe for cannabis users to obtain necessary local AND State licensing may require a building owner to hold tight without receiving full rent, for well over one year sometimes.  Structuring the correct Lease with ‘benchmarks’ and, above all, absolute clear communications between all parties is critical.  And then there’s certain Lease clauses that need addressing…like the fact cannabis is still Federally illegal

Give us a call @ (562) 424-7974 and we’d be more than happy to review your potential cannabis approved property or requirements!


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