Joint Tenancies: Property Leasing in Cannabis Commerce

Joint Tenancies: Property Leasing in Cannabis Commerce, 2018, ABA Book Publications, ISBN: 978-1-64105-064-7

4 Pages Posted: 31 Dec 2018

See all articles by Michael N. Widener

Michael N. Widener

Bonnett, Fairbourn, Friedman & Balint; Embry-Riddle Aeronautical University

Date Written: April 27, 2018

Abstract

Until Cannabis is rescheduled to permit its use under the CSA, or the Controlled Substances Act itself radically is amended by federal legislation such as proposed in the 2017-introduced Marijuana Justice Act, the operation of a marijuana dispensary or store, or a grow or compounding site, is a federal crime punishable under federal courts’ sentencing guidelines that include fines and jail time. The fact that marijuana sales are legal under a state’s law does not change one basic principle. Legal compliance with state laws governing marijuana business operations is not a defense to federal drug or money-laundering charges. As explained in the book’s text, property leasing to a marijuana business today, whether it’s a retail operation or a cultivation or “grow” location, exposes a landlord to civil and criminal penalties. Among other penalties available to federal authorities is forfeiture of a landlord’s property. In that regard, leasing to an MBE remains a sober undertaking. And that’s true despite both the trend toward state approval of marijuana business operations and recurring Rohrabacher-Blumenauer Amendments overlaid upon serial federal appropriations bills preventing the DEA from pursuing Cannabis businesses obeying their respective states’ laws.

Joint Tenancies offers an analytical look at how landlords and potential tenants ought to work – jointly -- to address myriad challenges (for example) in how rent is to be paid (to prevent the landlord’s exposure to money laundering charges), in assessing CAM charges for tenant consumption of utilities, in how to minimize dangers of mold infestation of the premises, and a host of other practical problems confronting potential leasing parties. The book’s text includes sections discussing obtaining land use entitlements for marijuana business-operated property, lease credit-enhancement techniques and thoughts on adapting to the new era of recreational marijuana regulation, especially in social use settings.

Note: The book's author is a Zoning Adjustment Hearing Officer for the City of Phoenix and a Member of the Arizona State Liquor Board, as well as a real estate attorney in private practice.

Keywords: commercial leasing, marijuana, cannabis, property law, zoning law, Controlled Substances Act, money-laundering,

JEL Classification: K11, K23, K42, R38

Suggested Citation

Widener, Michael N., Joint Tenancies: Property Leasing in Cannabis Commerce (April 27, 2018). Joint Tenancies: Property Leasing in Cannabis Commerce, 2018, ABA Book Publications, ISBN: 978-1-64105-064-7. Available at SSRN: https://ssrn.com/abstract=3164684

Michael N. Widener (Contact Author)

Bonnett, Fairbourn, Friedman & Balint ( email )

2325 East Camelback Road
Suite 300
Phoenix, AZ 85016
United States

Embry-Riddle Aeronautical University ( email )

Prescott, AZ 86301
United States

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