California Marijuana Sales & Use May Still Pose Landlord Legal Challenges — Cannabis Law Group’s Medical Marijuana Legal Blog — February 14, 2023


Hashish Legislation Group

Marijuana cultivation, processing, sale, and possession is authorized for adults in California. Sadly, that doesn’t imply all authorized challenges have been abated. In some circumstances, landlords – business and residential – might proceed to face sure authorized challenges.

As longtime Los Angeles marijuana lawyers, we’re dedicated to defending the rights of Southern California hashish companies – and the ancillary operations that serve and/or depend on them.

Central to defending everybody concerned is a carefully-written lease settlement – one which takes into consideration all related state legal guidelines and native ordinances, in addition to potential liabilities for every get together. Working rigorously with a marijuana enterprise lawyer can go a good distance.

Can a California Landlord Refuse to Hire to Marijuana Retailers or Customers?

Quick reply: Certain. (Most likely.)

Marijuana consumer is just not a protected class when it comes to housing anti-discrimination legal guidelines. There could also be an issue if the true underlying subject is incapacity, however basically, leisure use or sale of marijuana isn’t a assured proper on another person’s non-public property.

AB 1482, aka the Tenant Safety Act of 2019, prohibits termination of a residential lease with out simply trigger if the tenant has occupied the property constantly for a minimum of a 12 months. “Simply trigger” causes could be no-fault or at-fault. For instance, intensive renovations of the property could be a simply trigger with out fault. Utilizing the property for illegal functions could be at-fault simply trigger. Residential tenants utilizing or rising marijuana is technically towards federal legislation, however probably aligned with state legislation, so a landlord might have a tricky time evicting on this foundation – except prohibition of such is written into the lease and signed by all events. Failure to abide the lease phrases is probably going simply trigger for eviction.

As for business leases to marijuana companies, there’s no rule that claims landlords have to hire to those operations. But when they do, it’s in all probability sensible for everybody to very rigorously contemplate and evaluation the lease phrases – ideally with a lawyer offering oversight.

Hashish Issues in California Industrial Leases

With respect to business landlords and tenants, some concerns that should be weighed earlier than signing off on a lease settlement:

  • Related prohibited use restrictions. Native ordinances would possibly influence the phrases and/or implementation of economic leases to marijuana companies. Marijuana gross sales are authorized in California – however is the property in an space with noxious use restrictions? Are there any native ordinances that restrict the variety of brick-and-mortar marijuana companies in that area? Will this settlement be in compliance of that ordinance?
  • Native zoning laws. Is the property appropriately zoned for business hashish cultivation or gross sales? Some communities might restrict the areas the place these operations are free to do enterprise.
  • Monetary bandwidth of tenants. There are sometimes some important monetary obstacles to coming into the business hashish business. And because of federal legal guidelines, most aren’t eligible for conventional loans, insurance coverage, and many others. This must be thought-about, as does fee strategies; some companies might realistically solely be capable of pay hire in money.
  • Security and safety. Is the location arrange for the safety measures that can be essential to adequately tackle security issues? Who’s answerable for which points of safety? What sort of legal responsibility settlement exists between landlord and tenant if an harm ensuing from an accident or crime happens?
  • What if the mortgage is threatened? For probably the most half, the federal authorities not interferes with hashish firms (and property house owners) as long as they’re compliant with state legal guidelines. That mentioned, the language in some mortgage contracts stipulate revocation if not all relevant legal guidelines are adopted. Which may embrace federal legal guidelines that also contemplate marijuana an unlawful Schedule I narcotic. The phrases of that mortgage contract needs to be rigorously reviewed. Particular insurance coverage might have to be secured. And landlords might ask for a provision that permits for early termination of the lease if the owner is threatened with mortgage default for continued leasing to a hashish firm. Comparable escape clauses might have to be included for the potential interference from a authorities company as properly.
  • Making certain operations are licensed. Landlords might contemplate together with license contingencies into the lease settlement. A hashish enterprise that isn’t appropriately licensed places the owner in authorized jeopardy. The lease language must mirror that.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary firms, sufferers, medical doctors and people going through marijuana prices. Name us at 714-937-2050.

Further Assets:

A Quick Guide to Leasing to a Marijuana-Related Business, Feb. 28, 2019, American Bar Affiliation

Extra Weblog Entries:

California Cannabis Delivery Rules Evolving, Jan. 21, 2023, California Hashish Enterprise Lawyer Weblog

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