The challenges associated with attracting investment in the cannabis industry mean that many new businesses launch with financing from family and friends. But that doesn't exempt these businesses from the need for good due diligence.
Cannabis businesses that are hoping to expand across state lines should absolutely be aware of the triggering levels for regulatory background checks in different states. Just because an investor is a minority owner doesn’t mean they can avoid regulatory scrutiny.
Real estate is an attractive opportunity for investors who want to be involved in the legal cannabis industry without operating a dispensary or grow facility themselves. This is partly because identifying locations that meet the needs of these businesses and also pass zoning and regulatory scrutiny is a major headache for operators. The unique challenges – and high costs – of finding viable locations for cannabis businesses lead to some unusual arrangements between landlords and tenants, and these arrangements pose their own risks to each side.