Looking to Buy or Refinance Cannabis Real Estate? Five Things You Need to Know

If you have clients who want to buy or refinance cannabis real estate, understanding the legal and financial nuances is essential.

The cannabis industry has grown rapidly, and so has the demand for real estate that caters to it. Whether you or your clients are looking to refinance an existing cannabis-related property or want to buy property for a dispensary, grow facility, or processing plant, there are several unique factors to consider. At Certified Title, we’ve helped countless clients navigate the complexities of cannabis real estate transactions.

Please read on as we share five key things you should know before making any moves in this specialized market.

1. Inform us upfront if the real estate closing is cannabis-related.

If you don’t disclose the cannabis-related nature of the property at the outset, it can create significant delays and complications in the closing process, potentially leading to legal issues, financing challenges, and regulatory hurdles. The title company must be willing to write marijuana title insurance and be knowledgeable regarding the nuances of cannabis-related closings. Certified Title has extensive experience with these transactions and their complexities. We evaluate cannabis real estate closings on a case-by-case basis, so disclosure upfront allows us to quickly determine if we can insure your property.

2. Certified does not have standard exceptions for cannabis real estate transactions.

Without title insurance, you are at significant risk when buying or refinancing any property.  Certified Title does not impose standard exceptions for cannabis-related title policies. Generally, we treat cannabis-related transactions as traditional commercial real estate transactions rather than as a separate category. This is a tremendous benefit because it streamlines the process, eliminates unnecessary complications, and ensures that you receive the same level of protection and service as any other commercial property.

3. Our cannabis-related title insurance exceptions process is simple.

If the property involved in the transaction is going to be used as a marijuana facility or is already being used as one, the insurance company will have additional requirements that must be met before they will issue a title insurance policy. Our cannabis title insurance team has streamlined this process as much as possible. We only require the following additional information for cannabis transactions:

• Property use relating to cannabis: (i.e. dispensary, grow facility)
• Insured’s relationship to the cannabis product: (i.e. Owner, Tenant, Lender)
• Zoning endorsements may only be issued if the zoning report/letter specifically addresses the use of cannabis

4. Due diligence is critical.

When buying or refinancing cannabis real estate, due diligence is essential. The unique nature of cannabis real estate means there are potential risks that other properties don’t face. For example, you’ll need to assess whether the property has any history of legal issues related to its use. Additionally, make sure to check the condition of the building, particularly if the property will be used for cultivation or manufacturing, as these operations often require specific environmental controls. Certified Title offers thorough due diligence services that include title searches, lien searches, and a review of the property’s legal history.

5. Insure with confidence.

In most cases, Certified Title can insure transactions that relate to cannabis properties. While many real estate and title professionals shy away from the cannabis industry due to a lack of understanding of the laws surrounding this unique and emerging industry, we have been servicing the legal and title needs of entrepreneurs for decades. We are well-equipped to handle your cannabis property purchase or refinancing because we have done our research, we know the law, and we have unsurpassed knowledge of the real estate industry. Certified treats cannabis-related title work with the same exceptional level of service as all of our other transactions. As your full-service title agency, you can expect the highest level of competency, regardless of what business you’re in.

If you are seeking to buy or refinance cannabis real estate, it requires navigating a unique set of challenges. From zoning and financing to title insurance and taxes, many factors can complicate a deal in this industry. By working with the seasoned experts at Certified Title, you can ensure that your transaction goes smoothly and meets all legal requirements.

Ready to take the next step? Contact Certified today and let us help you navigate the complexities of cannabis real estate transactions.

About Certified Title Corporation: Since 1994, attorney-owned Certified Title Corporation has been furnishing residential and commercial real estate stakeholders across the nation with robust title insurance, settlement, and escrow services. Renowned for industry-leading reliability and an exemplary level of service and quality, the Maryland-based company helps clients from all walks of life achieve their asset goals. To learn more, call (888)486-5511 or visit https://www.certifiedtitlecorp.com/.