So last night, Missouri voters officially approved the use of medical marijuana with a landslide passage of amendment 2. This puts a 4% tax on medical marijuana and is estimated to generate nearly 24 Million dollars for the state of Missouri. The revenue would first support the regulation of the program and any leftover would go to help Missouri Veterans. Missouri is the 32nd state to legalize medical marijuana.
All of that sounds good, right?
Well as I was watching the coverage last night, and then watching the online response online I noticed a lot of Real Estate professionals expressing excitement for the passage of amendment 2. It got me thinking about a course I recently took about marijuana and Real Estate.
At the federal level, marijuana remains classified as a Schedule I substance under the Controlled Substances Act, where Schedule I substances are considered to have a high potential for dependency and no accepted medical use, making distribution of marijuana a federal offense. Now the intent of this blog is not to spawn off an argument or discussion about the potential of dependency. The intent here is to identify a massive issue for real estate agents, developers, and people who either work or intent to work with dispensaries.
Before I go any further, I’m not an attorney. None of what you read here should be used as me advising you on the legality of working in or around the marijuana industry.
Civil asset forfeiture
This is one of the biggest issues that business owners need to watch out for. Especially if you own a shopping center or a building where a dispensary wants to set up shop. If you own an industrial property where marijuana could be grown or you’re a landlord who is renting a home or a building where someone who uses or grows marijuana, you likely and should have a legitimate fear of civil asset forfeiture. If you’re unfamiliar with CAF, that’s where the federal government seizes your property if it’s used to conduct illegal activity (that was known or should have been known to the owner), or was purchased with the proceeds of an illegal activity.
Since marijuana is illegal under federal law, property owners may forbid the growing or use of marijuana, just to steer clear of the possibility they’d lose their property because of it.
Harder for marijuana-related businesses to get mortgages
Banks are backed by the federal government, and because marijuana is illegal on a federal level, many lenders have no interest in approving a mortgage for someone interested in starting up some sort of marijuana-related business. I should say that it’s not that they may not want to, they can literally have their doors closed by making loans for businesses that sell marijuana.
There are two things in life that are certain. Death and taxes, right? A business that sells marijuana is not exempt from paying taxes….federal taxes. So imagine how that goes over when a business owner lets the federal government know that they’ve made their money by selling a schedule 1 substance. If you’re not sure what happens, scroll back up to the civil asset forfeiture section of this blog.
Real Estate Agents aren’t exempt from this either. When you as an agent help someone who buys a property or manages a property that has these types of places in them are at risk of losing their real estate license, because you guessed it……You can be found guilty at the federal level because you knowingly leased a place to a tenant who was running an illegal (at the federal level) operation. To make matters worse, you would also face discipline according to your state’s statutes and administrative rules regulating your real estate license, which require you to abide by state and federal law.
So whatever your situation is around medical marijuana, this is very new territory for the United States and the state of Missouri. If you’re looking for getting into the dispensary business, or if you’re an agent who is interested in helping business owners find a place to open their dispensary business. You need to be very careful, and you should most definitely consult an attorney.
Questions, Thoughts, Comments or Concerns?
Let me know in the comment section below!