Everything You Need to Know About Finding & Investing in Cannabis Real Estate

Everything You Need to Know About Finding & Investing in Cannabis Real Estate

The legal cannabis industry has had a tremendous effect on residential and commercial real estate properties. According to research from the National Association of Realtors (NAR), many residents living in states with cannabis properties say that the housing market has been tighter—likely because of the growing industry.

The same report shows that hemp and CBD real estate needs have influenced demand. Some examples of changes associated with cannabis legalization include:

  • 23 percent increased demand in storefronts.
  • 18 percent increased demand in farmland.
  • 36 percent increased demand in warehouses.

It’s impossible to say that the increased demand comes exclusively from medical and recreational cannabis legalization, but there’s a strong connection that industry experts have noticed.

Clearly, there’s a lot of money to make by investing in cannabis real estate. Like any investment, though, you need to make informed decisions to reap significant returns. The following guide cannot ensure that you find and invest in the perfect cannabis real estate, but it can certainly point you in the right direction.

Know the Different Types of Hemp and Cannabis Real Estate

Cannabis and hemp real estate has several categories that you should consider before determining which option fits your investment goals and local laws. Some popular real estate categories include:

  • Retail storefronts for CBD
  • Retail storefronts for recreational cannabis products
  • Dispensary real estate for medical marijuana products
  • Farmland for growing cannabis
  • Farmland for growing hemp
  • Residential real estate for growing hemp
  • Residential real estate for growing cannabis
  • Warehouse space for storing hemp and cannabis products
  • Warehouse spaces for indoor cultivation
  • Industrial space for making hemp or cannabis concentrates and other products

Learn Your State and Local Laws

As of mid-2021, 17 states and Washington, D.C. have recreational cannabis laws that let adults over 21 years old purchase cannabis products from licensed dispensaries or retail stores. Many other states have medical cannabis laws that let patients purchase medicine with prescriptions from their doctors.

The Farm Bill makes CBD legal in all 50 states, but products cannot contain more than 0.03 percent THC, which makes edibles, tinctures, and other products non-psychoactive.

It’s critical to note that every state has its own laws regulating the cultivation and sale of hemp and cannabis. Some states let adults grow a small number of cannabis plants on their personal property. Other states forbid personal cultivation.

Even in states with fairly permissive cultivation and sales regulations, rules can change from community to community. You might find it easy to get cannabis properties in West Hollywood licensed. Growing or selling cannabis in a more conservative area, however, could create many more challenges.

Whether you want to invest in 420 properties in California, Oregon, Colorado, or elsewhere, you must know how local laws will affect your investment. It’s never a bad idea to consult a cannabis business or real estate lawyer before you invest.

Your Cannabis Real Estate Will Require a Permit or License

No matter what type of cannabis or hemp properties interest you, you will need to get a permit or license before you can begin operations. Again, permit and licensing requirements can vary greatly from area to area.

Don’t assume that you can purchase CBD real estate and start growing hemp just because the Farm Bill made CBD products legal. States still require permits before you can grow hemp plants. Hemp and marijuana look extremely similar. In many ways, they’re the same plant. They do, however, contain different levels of chemicals like THC and CBD. States want to make sure that hemp farms follow regulations and do not try to make extra money by growing THC-rich cannabis.

Limited Permits

States, counties, and municipalities often have a limited number of permits for cultivating and selling cannabis products. If you cannot get a permit, it doesn’t make sense to purchase CBD properties and real estate for sale in that area. You have no idea how long you will have to wait before you can receive a permit that lets you start growing or selling.

You might think that 420 properties in California make it easy to cultivate cannabis. That isn’t always the case. Your opportunities might depend on how many permits the area has.

Buying Permits on the Secondary Market

Limited licenses and permits don’t necessarily mean that you cannot start reaping returns on your investment. Even if an area has already given all of its licenses to cultivators and storefronts, you could buy one on the secondary market.

Securing Funding for Hemp and Cannabis Real Estate

More and more states recognize that they need tax revenues from legal cannabis and hemp sales. The federal government, however, still considers cannabis an illegal drug. There is very little chance that the Department of Justice would ever target a cultivator or dispensary operating within a state’s legal framework. Conflict between federal and state laws, however, can make it difficult for investors to secure funding when they want to buy, lease, or rent real estate.

When most people want to purchase real estate, they go to banks or mortgage brokers to borrow money. Since most banks operate across state lines, they tend to worry about following federal laws as closely as possible. This makes them nervous about funding businesses in the cannabis industry. Many even feel uncomfortable lending money to buy hemp properties.

Instead of wasting time with banks that will probably turn down your application, turn to private lenders that don’t need to think as much about following every aspect of federal banking laws. Don’t give up on your investment opportunity until you research funding options through 420property. While 420property does not function as a lender, it does have connections to lenders that might want to help you fund a cannabis real estate purchase.

Make sure you follow these steps before applying for a cannabis business loan. An accurate credit record and high credit rating will make it easier for you to secure funding at an affordable interest rate.

Concentrates, Edibles, and Other Cannabis Products Offer More Investing Options

Edibles have become increasingly popular among people who want to consume CBD and THC discreetly. Edibles—including tinctures, oils, and gummies—also provide a smoke-free way to consume THC and CBD. Health-conscious consumers who enjoy using THC and CBD might shy away from smoking. Edible options make them feel better about enjoying cannabis products.

Commercial and industrial cannabis real estate often makes a good investment opportunity for people who want to get into the edibles market. In addition to purchasing or leasing 420 properties, though, investors need to access extractors that can remove chemicals from raw plant materials efficiently.

Iron Fist Extractors stand out as one of the best options because the company designs and manufactures all of its equipment in the United States. You can also get a customized system designed for the type of extraction that interests you.

If you want to invest in extraction, explore your options to find a cannabis supplier, equipment manufacturer, and warehouse space you can use to reach your goals.

Find a Cannabis Real Estate Broker in Your Area of Interest

Cannabis real estate can a successful investment can take a lot of experience and exploration. Purchasing a plot of land does not ensure that you can grow cannabis successfully. You need to know that cannabis and CBD properties for sale have fertile soil, irrigation systems, greenhouses, storage facilities, and other features that will help you reach your goals.

Unless you have significant experience in hemp and cannabis cultivation, it makes sense to use a cannabis real estate broker who can help you identify the best properties.

Finding and investing in cannabis real estate doesn’t mean that you have to purchase land or buildings in your area. It’s possible to invest in real estate in other states, too. You might discover excellent opportunities hundreds of miles from where you live. You can take advantage of those opportunities when you rely on an experienced, trustworthy cannabis real estate broker to find a property that fits your needs.

When you find cannabis real estate that interests you, 420property will help you locate a cannabis real estate broker in that area. You might want to visit the property before finalizing your purchase. Outside of occasional visits, though, the investment property can largely function without your involvement. That way, you make money from real estate without spending much time or expending much effort. You let your investment generate profits for you.

Explore Cannabis Investments With 420 Property

Want to learn more about investing in hemp and cannabis real estate? Search for cannabis real estate listings to find a property that meets your budget and business interests. Take some time to explore your options and learn about the advantages of investing in certain areas. The more you know about cannabis real estate investing, the more likely it is that you will reap significant returns on your money.

June 10, 2021Comments Off

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