Cannabis Tenants Avoid Signing Cut-and-Dried Leases

October 31, 2014
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As more states legalize cannabis for medical use, more legal cannabis businesses are looking to rent property where they can grow and/or sell their product. Most commercial property owners don’t have a lot of experience leasing to cannabis businesses, so they may ask these tenants to sign the same standard form commercial lease they use with their other tenants. But cannabis businesses are not like other tenants, and they can’t use the same lease other tenants do.

If you’re a purveyor of cannabis, your business poses unique legal challenges, and you need special lease provisions to deal with them. So, you need to get the owner to revise the boilerplate lease to make it work for cannabis. You should pay particular attention to provisions relating to permitted use, the owner’s termination rights, tenant improvements, mode of lease payments, utilities, and the covenant to comply with all laws (especially since growing and selling cannabis is still illegal under federal law).

For details on how to rework these sections of a standard lease to make them appropriate for a cannabis tenant, see “Get Nine Protections When Leasing Property for Your Cannabis Business, available to subscribers here.