Commercial Leases Involving Cannabis Businesses
By Ben Leonard and Brett Williams
Mar 9, 2021
A Practical Guide for Landlords and Their Counsel
The following excerpt is from an article published this month by the Colorado Bar Association.
As the cannabis industry continues to grow in Colorado, commercial landlords and their counsel will encounter tenants with cannabis-related businesses more frequently. This article addresses issues unique to these lease transactions and offers suggestions for structuring such leases to maintain regulatory compliance.
The prolific rise of the cannabis industry in Colorado over the past decade has had a pervasive effect on the industries that support it, including the commercial real estate industry. Real estate attorneys are increasingly encountering cannabis-related matters in their general practice, so it is critical that practitioners understand the state’s legal framework regulating cannabis and how their clients fit into it.
This article explores the cannabis legal landscape as it relates to commercial landlords in Colorado. It addresses factors landlords should consider before entering the cannabis space, offers suggestions for structuring lease provisions in the cannabis industry context, and discusses the potential impact of Internal Revenue Code (IRC) § 280E on property owners.