Cannabis Real Estate – How Investors Should Screen Cannabis Business Owner Prospects
Cannabis Real Estate – How Investors Should Screen Cannabis Business Owner Prospects
Cannabis Real Estate – How Investors Should Screen Cannabis Business Owner Prospects
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While the world of cannabis real estate investing is rapidly becoming socially accepted, there still lingers some amount of perceived shadiness (whether legitimate or not) in the industry. In this video, Richard Ormond, attorney, shareholder at Buchalter, and the nation’s first cannabis business law professor, helps to quell any hesitation for would-be cannabis real estate investors by illustrating how to effectively screen their business owner prospects.
From this video:
Richard: What we’re going to see, however, is that there is a couple of risks that landlords … Lenders, landlords, whoever need to be cognizant of. The first is that they have to analyze their borrowers’ taxes because taxes are the tail that wags the dog in this industry. If they’re not doing everything they can to maximize their returns, literally and figuratively – their tax returns, and then returns to their pocket – they may not be a good borrower because almost 70 percent of your gross revenue goes to different types of taxes, if you’re not structured the right way. If you’re the landlord, or the lender, for that matter, you may fall second in priority to the government regardless of how secured you are in the real estate. So, you have to be really, really careful as to the finances and operations of your borrower.
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