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Commercial Pot Tenants Need Signed Landlord Permission Slips

By George Khoury, Esq. on January 22, 2018 | Last updated on March 21, 2019

Under California's new legal marijuana laws, in order for a marijuana business that rents space to be licensed, the business's landlord must provide a written acknowledgment that they know their property is being used by a commercial marijuana business.

Basically, pot shops need to get their landlord's permission to operate. But, making landlords acknowledge in writing that they know their property is being used by a marijuana business might be trickier than it sounds, especially because it could potentially result in backlash under federal law (which is actually now a concern). And, what's worse, for landlords, refusing to provide such an acknowledgement could very well be a violation of California law. Talk about a catch 22. It makes you wonder what the person who wrote the law was smoking ...

Cannabiz Landlord Lawyering

Luckily for lawyers and cannabiz landlords, so long as you aren't accepting ownership or pot as payment from a cannabiz, there isn't too much to worry about, at least for now. So long as you do your due diligence, marijuana business tenants could very well be a boon for your landlord clients.

However, before you advise your landlord client to either agree to rent to a cannabiz, or provide a requested written acknowledgement, you may want to consider taking a second look at the whole deal. One often overlooked issue is that there are risks of loss and/or damages that could stem from the renting cannabiz that an insurer may not cover.

Also, there is the very real risk of federal civil asset forfeiture being used against the entire subject property and landlord, rather than just the contents of the cannabiz, and the business's owner. Not to mention the fact that it could become impossible, or just more difficult, to leverage the value of a commercial property that's being rented by a marijuana business.

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