How to Protect Your Lease For a Marijuana Business

There are plenty of controversies surrounding the use of marijuana because of its potentially hazardous effects. However, you can’t deny that it has medicinal properties to aid patients in dealing and treating their disabilities and ailments. For example, patients with Parkinson’s disease can use medical marijuana to relax their muscles if they experience severe tremors.

Many US states now prohibit the use, growth, and sale of medicinal marijuana, but it also involves risks for property owners. Although state laws do permit the use of medical marijuana, federal laws prohibit the utilization of the substance in any fashion. However, there are ways to protect your marijuana business by making some adjustments to your lease to work in your favor.

Protection #1: Permit the Use

 Normally, many property owners would insist on using a clause in the leasing contract that clearly defines the allowable activities tenants can do within the premises. Unfortunately, some owners tend to be squeamish when the subject of marijuana slides into view as personal judgment overrules thinking about the possibilities of business growth. As a landlord, you can use a clause that specifically indicates you’re leasing to a marijuana business. It should list all the marijuana-related activities the tenant may conduct within the property which may include recreational sale, prescription sale, processing of plant parts, storage, and cultivation.

Protection #2: Complying with All Laws

 The problem with the use, growth, and distribution of medical marijuana is federal laws will always be superior to state laws. Property-owners can modify the standard compliance covenant by rewriting it so it requires tenants to comply with all applicable state and local laws. The covenant should include but not limited to the program rules, state marijuana licensing, and local zoning ordinances. Note that compliance with all federal laws is still possible, but it requires the tenant’s right to use the location for their medicinal marijuana operations.

Protection #3: The Rights to Early Termination

 Since marijuana is still illegal under federal law even in states where they’ve already ruled it to be legal, leasing to a marijuana business can expose you as a property-owner to legal risks. To protect you from potential hazards of leasing to a marijuana business in your property, tweak the contract to include an exit clause to give you the right to terminate the lease immediately should the hammer of law come crashing down your doorstep.

Dispensary eviction can call for “Early Termination Events” to be included in the lease, and these can include getting hit with a nuisance claim, foreclosure of your bank account, or tenant rebellions.