Cannabis real estate is a golden opportunity for investors to earn a lot of profit. But it also involves a lot of risk factors that investors must know if they want to avoid any significant loss. It is better to have the detailed knowledge and information regarding cannabis real estate beforehand. It will further help investors determine the best ways to maximize profit.
Here are a few things mentioned that investors must know before buying Cannabis real estate.
Limited Options
The value of Cannabis real estate properties continue to rise but there are limited options available in any location to invest. Due to the lack of options and opportunities, investors might have to make the best decision based on the estimated values and results. It will help if they hire an expert to take the right advice and suggestion from him as it will eliminate the chances of any loss.
Deals
Cannabis deals are more complicated than other industrial transactions. When you compare the difficulty level of its deals with other traditional deals, it will turn out to be one of the most difficult transactions. However, 80% of the investors are still willing to invest in Cannabis real estate properties despite the difficulties and hardships they will have to face throughout the process.
Limitations
Cannabis operations have huge safety requirements as the products are at high risk of being theft. Also, the manufacturing processes include the usage of chemicals to extract compounds. It makes everything worse as local jurisdictions are likely going to limit zoning for the use of Cannabis into specific areas.
License
If you are planning to invest in Cannabis real estate asset, you must know the importance of having a Cannabis license. It is even more important than a state license, so you cannot get rid of it anyway. The reason behind is that the state offers unlimited licensing but the jurisdictions limit the number of licenses allowed for Cannabis production. So, you must prepare yourself for the hurdles or delays you might face to deal with such issues.
Equity Program
You must also know about Cannabis equity program that is established by the city to tackle the limitations of Cannabis licensing. This program can help a lot of local cultivators who don’t have the financial resources to go legal. However, the applicants of the equity program must meet an income threshold to get the permit for Cannabis production. This way, they won’t even have to pay the license fee.
Teams & Partnership
The Cannabis grower must also partner with an equity applicant to provide them with technical assistance and support. It is also suggested to form a team of broker, accountant, and attorney who have the relevant experience and knowledge of handling Cannabis transactions in the specific market where you intend to invest. You can also get a piece of advice from some experience Cannabis real estate investors before entering into the market.
