Issues in the Marijuana Industry: Real Estate

real-estate-300x157As more states legalize some form of marijuana use, business owners are finding new barriers to entry in the
industry. One of the biggest involves the search and procurement of real estate. Acquiring an operation license is only the first step in what can be a long, tedious, uphill battle toward a successful cannabis operation.

Lack of Lending and Mortgages

Since the growth, sale and distribution of marijuana is still illegal at the Federal level in the U.S., financial institutions have steered clear of businesses with involvement in the cannabis industry. Banks face criminal prosecution, asset forfeiture and large amounts of liability if they are found to be involved with illegal businesses. It is because of this that marijuana-related businesses do not have access to traditional forms of lending and mortgages. Without access to the capital processes that other businesses have, many have to find other ways to raise funds.

Risk of Civil Forfeiture

As any association with a marijuana-related business is deemed illegal by the Federal government, many landlords and property managers are hesitant to lease space to them at the risk of civil forfeiture. Just like with banks, any property associated with the marijuana business can be subject to asset seizure, though the Federal government has several guidelines which state that they will not spend resources pursuing state-legal and compliant marijuana businesses. Despite these guidelines, some property owners don’t want to carry the risk of this even taking place. Those who do, however, are indulging in the increased rent and property values in areas like Denver, where warehouse prices have doubled (and in some cases even tripled) in the last five years.

Finding Conducive Property

leasingFinding real estate that works for the growth and sale marijuana can be very challenging. Zoning and restrictions regulating the distance from schools, day care centers, rehab facilities and other make it difficult in a mature market like Denver. Business owners who want to get into the industry now are buying existing locations, since they are already “grandfathered in” and have met proper distance and zoning requirements.  Most marijuana production facilities are large, open spaces that require ample ventilation and can sustain lighting and watering systems. Finding property that meets all of these criteria can certainly be a challenge, and has even led to the emergence of marijuana-focused real estate brokers and agencies.

An Industry Stigma

Even when business owners are able to overcome the challenges described above, they still face a stigma about marijuana and the cannabis industry. People still associate marijuana-related enterprises and their owners with a lazy, laid back, “stoner culture” mentality. These business owners find it difficult to be taken seriously, and being an illegal substance in the eyes of the Federal government doesn’t help. These barriers have driven marijuana businesses to band-together to not only change the perception of the industry, but to make the process easier and more conducive so that everyone can be more successful.

Announcing Dynamic Alternative Finance

DYNAMIC ALTERNATIVE FINANCE LAUNCHES AS CAPITAL ARRANGER
AND FINANCIAL ADVISOR FOR CANNABIS INDUSTRY

Denver, CO — September 1, 2015 – Dynamic Alternative Finance (DAF) announces its formation and official launch as an independent capital arranger and financial advisor to alternative businesses, with a specific focus on the cannabis industry. The company helps marijuana business owners and other businesses arrange financing solutions for equipment, real estate and working capital.

“We use our existing relationships and referral business partners to find the right funding for alternative businesses, including those in the cannabis industry,” says Dynamic Alternative Finance. “Banks and traditional lenders are currently not an option for marijuana business owners, which is where we come in – helping to source the proper financing while protecting company assets, intellectual property and preserving working capital.”

DAF has arranged over $12.5 million in loans and equipment leases for the cannabis industry and other businesses this past year. He is an author, speaker and nationally recognized finance expert in the cannabis industry, helping business owners’ access debt-based funding solutions and preserve equity in their companies.

“Dynamic Alternative Finance helped us obtain the  money  we needed  for expansion without requiring us to give  up  any  equity or control  in our company,“ says Erich Pearson,  owner  of SPARC, a San Francisco marijuana collective.

 

Cannabis World Congress and Business Expo – September 16-18, 2015

Cannabis World Congress and Business Expocwcbe-logo-450x105
Los Angeles, CA
September 16-18, 2015

DAF will be presenting Debt-Based Capital for your Marijuana Business: an in-depth look at how to obtain private, non-bank financing for working capital, equipment or real estate loans. Learn which options are available for financing your existing marijuana business, and how every marijuana business owner can create wealth by owning their commercial real estate.

Marijuana Business Conference and Expo – May 19-21, 2015

Marijuana Business Conference and ExpoChicago Tradeshow logo
Chicago, IL
May 19-21, 2015

Join DAF to see Why Debt is Better than Equity for expanding your business. In the presentation, some of the $6 million in deals we have arranged in the last year will be discussed, and we will dive into a case study of a company that retained $10.6 million more when they sold out one last year by using the principles I will discuss.