Investing in the Marijuana Industry

While Colorado has a legal framework for the cannabis industry it's still illegal under federal laws. So, there's a lot of regualtory due dilligence to be done. We always suggest speaking with a local attorney that specializes in the industry.  There are regulations and recent case law that gives guidance to proper, compliant investment strategies.

Here's some general items to consider;

Prices are high and good buildings sell very quickly. Plenty of buyers out there.

Good growing operations can be extremely profitable for the growers

Rents 'average' $15- psf, nnn depending on any existng build out or improvements

Rent cannot be 'Paid in Kind' from the production or products being grown

Tenants will usually pay their rent in cash direct to your bank

Tenants generally will not rent a building with a loan or encumberance attached

Buildings cannot have a commercial loan as banks are forbiden from the industry

Hard money lenders have a very high rate of failing to fund at the last minute

Insurance is available for the building and the tenants would pay for it

As a landlord you do not have any direct regualtory requirements or restrictions

Existing businesses often sell for a 12+ cap rate

Don't buy a business that's based on a 'leased' property - many potential issues

Be sure to consult with a specialist attorney to keep everything fully compliant

 

Zoning and
Regulations:

 
marijuana investing