You could easily say that this past November’s elections were an important turning point for the state of cannabis law in the country. With victories in several states, including here in Florida, more Americans now have access to treatment or relief from pain.
Changes in Cannabis Law Have Far-Reaching Effects
As stronger scientific evidence emerges about the efficacy of marijuana for medicinal purposes, more dispensaries will begin to emerge and more experts and experienced attorneys will be needed. This new frontier will have far-reaching implications, and not just in the medical community. Legal and political circles will be busy too, as legislators and constituents maneuver through the intricacies of implementing a whole new network of medical marijuana points-of-service.
But there’s another industry that’s largely been ignored by most industry influencers and by the media in cannabis law discussions: real estate. As more licenses are sought for dispensing medical marijuana, and more storefront operations come into existence, property owners, property managers, Realtors, and business owners will all become heavily involved in the mix.
The State of Things in Florida
According to the News-Press¹ out of Fort Myers, around 450,000 Florida residents qualify to seek treatment at medical marijuana treatment centers. That translates into a multitude of properties newly involved in the complex details of cannabis law as it pertains to real estate.
Part of what makes things so complex is that while the use of cannabis has been approved in Florida for medicinal purposes, distribution of marijuana is still a federal offense. Not only that, but medical professionals are, under federal law, prohibited from prescribing marijuana, as it is a Schedule 1 substance under the Controlled Substances Act.²
The DEA claims there is not enough proof of marijuana’s medical value, but the DEA knows that the only reason there is not enough proof is because researchers cannot obtain and study marijuana to get the proof while it remains a Schedule I drug.
That puts business owners, landlords, real estate professionals, and property managers in a position that’s awkward, to say the least. There is immense opportunity in the cannabis industry right now in Florida. At the same time, there is much conflicting legislation confusing the legalities of every type of real estate transaction from residential to commercial, whether it is leasing, purchasing, or selling.
Pain Points in Real Estate
Realtors and property owners have a whole new world of concerns, thanks to legalization of medical marijuana in Florida and beyond. For example, property owners may face civil asset forfeiture if the federal government decides illegal activity took place on the premises. They can also seize a property if they deem that it was purchased with money earned from illegal activities. And in their eyes, any marijuana business is illegal business.
Fed Government can seize property if deem purchased with $ from illegal activities #MedicalMarijuana Click To Tweet
Here’s a quick summation of what you need to know about cannabis law and real estate. It is by no means a comprehensive list, but it is a good starting point for understanding the complexities involved:
- Leasing property to a cannabis business means that technically you’re leasing to a criminal organization, according to the federal government. And if you are that business, you ARE that criminal organization in their eyes, even though medical marijuana is now legal in the State of Florida.
- Renting to someone who uses cannabis products means that you are renting to someone who is breaking federal law.
- Leasing commercial warehouse space that is used as a grow space for marijuana means you are breaking federal law.
- Business owners who grow marijuana face mold issues arising from the intense amounts of water required to grow the plant³. This is a property risk as well as a health hazard and a legal liability if you have employees.
- A property that has been used as a grow house may have a stigma attached to it, financing may be difficult to find, and insurers do not like them either. Therefore, they are difficult for Realtors to move (odors linger, too, exacerbating the problem!).4
Things to Consider
As marijuana legislation moves forward, it is clear that business owners, property owners, property managers, and real estate agents must stay current with the legalities of growing, selling, and using cannabis in the State of Florida.
You don’t have to go this alone, however. Peter J. Porcaro was at the forefront of cannabis law long before it became legal in Florida. The Porcaro Law Group can help you navigate the complexities of leasing, purchasing, or managing medical marijuana establishments in the State of Florida. To learn more, contact us now.
- Gluck Frank. Medical Marijuana Approved by Florida Voters. News-Press. Retrieved 12/14/2016 from http://www.news-press.com/story/news/politics/2016/11/08/florida-medical-marijuana-leading-votes/93170144/
- Drug Schedules. U.S. Drug Enforcement Administration. Retrieved from DEA website 12/14/2016 https://www.dea.gov/druginfo/ds.shtml
- Hidden Danger: Mold in Pot Grow Houses Threatens Workers, Law Enforcement.CBS Denver. Retrieved 12/14/2016 from http://denver.cbslocal.com/2015/03/25/mold-in-pot-grow-houses-threatens-workers-law-enforcement/
- Posadzki, Alexandra. Former Grow-Ops a Hard Sell in Real Estate Market. The Star. Retrieved 12/14/2016 from https://www.thestar.com/business/2015/06/30/former-grow-ops-a-hard-sell-in-real-estate-market.html