Author: Berekk Blackwell, COO and President at Zoned Properties
Finding and securing commercial real estate is one of the most difficult hurdles when launching a regulated cannabis business. Local municipalities in charge of community zoning and permitting regulations often oversee the regulation of cannabis real estate. Though state marijuana programs share some zoning standards, such as setback requirements of at least 1000 ft. from schools, churches, public parks, and more, every market has its nuances, and every business needs to abide by both state and local zoning rules.
In the U.S. there are approximately 39,500 local governing bodies with control over cannabis development projects, making the search for compliant real estate a difficult one. Here are some top things to consider when vetting cannabis properties for your business operation.
- Verify Zoning: The property first and foremost needs to be located in the correct zoning district as laid out in the governing locality’s cannabis related ordinance. In some cases, cities or counties may decide to create a cannabis overlay district and call out specific areas they’d like to see cannabis businesses opposed to generalizing them in existing zoning districts.
- Check Setbacks: The locality most likely will have also designated other business types that your cannabis business needs to stay a certain amount of feet away from. We call these “Setbacks from Protected Uses”. Typically these include churches, schools, parks, and other cannabis businesses. The setback distance varies significantly by municipality. In some cases the State will also have their own setback from a specific protected use as well.
- Property Owner OK with Cannabis Use: If you plan on leasing the property, you need to also verify that the property owner is ok with their building being used for a cannabis business.
- Property Owner’s Lenders are OK with Cannabis Use: If the property owner is OK with Cannabis Use, the next question is whether or not they have any debt on the property that may prohibit a cannabis business to operate within the building. Due to cannabis still being a federally illegal product, most FDIC insured lenders are unable to do business in the cannabis industry even if the debt is held by a third party landlord.
- Neighboring Businesses: Neighboring businesses in some cases have exclusions for cannabis co-tenants if the property is under common ownership (like a strip center). Typically these are found in large big box retailers.
Zoned Properties is a leading commercial real estate development firm for the cannabis industry. Headquartered in Scottsdale, Arizona, the Company’s core service divisions include Property Technology, Site Identification Advisory, Commercial Brokerage, and Property Investment. Ready to find your ideal cannabis property? Set up an appointment with a Zoned Properties’ Advisor or Broker today by emailing clients@zonedproperties.com.