The second annual Cannabis & Real Estate Conference will be held at the Delta Hotel in Woodbridge in Middlesex County on Friday.
The conference could be an insightful exploration of the regulatory process and real estate issues in the cannabis sector.
Use the promo code “headynj” for 10% off tickets!
Obtaining a good property is one of the three biggest barriers to entering the licensed New Jersey cannabis industry, alongside access to capital or money and a city council resolution.
Professionals seeking to navigate the evolving complexities of cannabis and commercial real estate might enjoy it the most.
Attendees will gain invaluable insights into the regulatory processes governing the cannabis industry. They might also learn about the very detailed real estate issues and problems in the dynamic sector of the New Jersey cannabis industry.
The cannabis industry continues to burgeon and intersects with commercial real estate in profound ways.
Whether you are a seasoned professional or a newcomer to the cannabis space, this conference will offer insight into the issues.
NJ Cannabis Real Estate Problems
In New Jersey, landlords have a lot of power in the cannabis industry.
A lot of small business owners, especially the most humble
For months, New Jersey cannabis entrepreneurs have told horror stories about the unethical behavior of landlords.
Federal marijuana prohibition makes it hard to conduct a state-legal cannabis business. Many big box chains are wary of being associated with cannabis. In addition the banks that lend money think they would be investigated for helping Organized Crime.
Most towns in New Jersey do not allow cannabis companies within their boundaries. Many pro-cannabis towns created Green Zones where cannabis companies are allowed. It’s often a small part of the town that might not include some of the most commercially viable parts of town.
Most New Jersey landlords by now have figured out that if they are in the Green Zone, they can charge a lot of money to cannabis companies.
Dealing with Landlords
Negotiations often can take months. Sometimes, they decide to pick a tenant who seems like a steadier source of money.
So, cannabis companies usually get charged what’s known as a Green Tax. It’s an added charge that makes opening a business especially hard. Some want a percentage of the business as a condition of occupancy.
With post-COVID-19 Amazon and online shopping popularity, they probably do not have as many tenants as they used to.
The landlords think each license holder will make millions of dollars. However, federal prohibition does not allow them to deduct their expenses from their taxes. So that makes it hard to generate such margins.
Between competition from nearby dispensaries, legal Delta 8 THC hemp products, and underground legacy operators, many first-time business owners with modest resources face a lot of issues under federal marijuana prohibition.
The lack of quality real estate and sympathetic landlords especially hurts bootstrapping local small businesspeople, minorities, and or female entrepreneurs.
The NJ Cannabis Regulatory Commission (NJCRC) requires that property be held for months, if not more, at least a year, between applying and opening. So, license seekers must spend thousands of dollars for months on empty storefronts and warehouses before making one cent.
