Leasing to a Cannabis-Related Business: Banking, Permitting, Zoning, Rent, Indemnification, and Insurance

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Real Property - Transactions
- event Date
Tuesday, June 7, 2022
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will advise counsel on preparing and negotiating commercial leases for the growing number of property owners seeking to lease to a cannabis-related business, as well as counsel for cannabis-related businesses who need to lease space, as the cannabis industry expands. The panel will discuss common issues that arise, including the structuring of rent, banking restrictions, permits, and zoning, as well as insurance and related risk management.
Faculty

Mr. Palmese’s practice focuses on the representation of purchasers, sellers, investors, developers, lenders, tenants, and landlords in all facets of their commercial real estate portfolios, including C-PACE, bridge, permanent and mezzanine financing, and solar, retail, and office leasing. He has been a member of the Commercial Real Estate Finance Council’s Sustainability Initiative, which focuses on the intersection of climate risk and commercial real estate finance, since its inception in 2021. He has served as a curator on the Content Committee for the Northeast Sustainable Energy Association’s Building Energy NYC conference—a conference dedicated to sustainability in real estate and decarbonizing the built environment.

Mr. Bench helps entrepreneurs, companies, and venture capital and private equity funds with international and domestic business transactions. His clientele stretches across Asia, Europe, the Middle East, Africa, and the Americas. National and global trade organizations regularly invite Mr. Bench to speak regarding international business transactions, particularly foreign direct investment to and from the U.S. and China. He is an emerging legal expert in the fast-moving and complex web3 ecosystem, including business and regulatory issues surrounding decentralized autonomous organizations (DAOs), smart contracts, decentralized finance (defi), cryptocurrencies, coins, and tokens, including non-fungible tokens (NFTs). He has worked on wide-ranging blockchain projects involving various international DAO communities, NFT artists and studios, layer-2 blockchain developers, metaverse companies, and celebrity brand influencers.

Mr. Sampson focuses his insurance coverage practice on assisting policyholders across various industries to address and resolve complicated insurance coverage matters relating to commercial general liability policies, property insurance, management liability coverages, and many other types of insurance, such as cyber liability, hull and marine liability, specie insurance and pollution liability insurance. While he routinely counsels clients at various stages on a wide range of insurance coverage matters, a significant portion of his practice is dedicated to litigating coverage claims against insurance companies and/or third-party claims administrators.
Description
With some form of cannabis use legalized in most of the U.S., commercial property owners are increasingly presented with opportunities to lease to cannabis-related businesses. State regulations legalizing CBD, hemp, and recreational and medical cannabis and conflicting federal laws require real estate and business attorneys to consider a variety of complex rules to draft or modify cannabis-related commercial leases effectively.
The unique challenges and opportunities inherent in leasing to cannabis-related businesses require counsel to reevaluate standard commercial lease terms and amend provisions such as rent structuring, licensing, zoning, permitted use of the premises, compliance with laws, inspection rights, law enforcement, and personal guarantees.
Listen as our panel advises counsel on preparing commercial leases for the growing number of property owners seeking to lease to a cannabis-related business, as well as for cannabis-related businesses looking to lease space to operate, as the cannabis industry expands. The panel will discuss common issues that arise, including the structuring of rent, banking restrictions, permits and zoning, and insurance and related risk management, including, but not limited to, contractual risk-transfer provisions.
Outline
- Overview of federal and state laws related to leasing to cannabis-related businesses
- Standard lease provisions to address
- Rent structuring
- Licensing
- Zoning
- Permitted uses
- Compliance with laws/representations and warranties
- Inspection rights
- Assignment and subletting
- Federal asset forfeiture
- Change of laws
- Additional concerns
- Banking
- Insurance coverage
- Practical considerations
Benefits
The panel will review these and other key items:
- Drafting and updating standard lease terms to reflect cannabis-related business tenant issues
- Developing a comprehensive plan to address specific issues relevant to cannabis-related businesses
- Lease terms that accurately reflect state regulations and the federal prohibition of cannabis
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