Hello everyone! My first time posting but lurking for awhile. I’m looking for advice on how to find my ideal partner, someone who has experience in investing in commercial and or industrial properties and has connections with other investors. The goal is to purchase properties to lease to cannabis companies. Should I hire someone to help me as an employee or should I try to form a partnership or some combo of both? I intend to make a post in the marketplace once I figure out the best way to go about it.
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If you have funds i would hire out everything. Hire talent and expertise.
Thank for the responses @Lexi Teifke and @Danny Webber . The reason I feel like we (my husband and I) need a partner is because traditional banks won't finance properties that are used for cannabis businesses so I believe finding investors is the best route. Problem is we have limited experience in real estate and we do not know many investors. I feel like investors would feel more comfortable investing in us if we have someone with a successful track record in commercial real estate on our team.
What my husband and I do have is 15 years of experience in the 'legal' cannabis industry and the ability to win competitive licenses across the country. In order to apply for these licenses we need to have the real estate first but most people won't lease to cannabis businesses because they fear their bank will call their note.
We have a couple of properties we would like to make offers to purchase contingent on us winning a license but our realtor is advising us not to submit an offer until we have proof of funds or a pre approval letter.
Our thought is to create a separate entity that our current cannabis company will own a part of, give some equity to the right partner and then either have investors invest directly in that entity so that they have some ownership in every property we acquire or they can choose to invest in individual properties with our company.
All advice is appreciated, thank you.
Put together a proforma/perspectus based on historical success. If it looks good enough and is verifiable you will not have time finding people with money. There is more money sitting around than deals right now.
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A few observations.
1. You might need more than one partner. Different skills for different roles. As someone has said, some of this can be hired in rather than a full partner.
2. You may want to combine the funds of more than one person into the venture. That implies a pooling of fund (collective investment scheme). There are SEC and state level regulations that apply. Easy enough for a competent person to deal with. I am just flagging it up before you get surprised.
3. The ability to grow the business will depend on how you position the company. There are banking issues. I am sure you are aware of that fact.
Happy to have a more details discussion. Reach out if you like.
Cannabis industry is a very very tuff market due to the complexities of regulations and compliance. Funding is also very difficult from traditional sources. This industry is the most regulated industry in the United States and having professional advise is a MUST or you can stand to lose it all.
Luckily we have been in the industry from it’s conception and have followed the constantly evolving law changes in state and aperitif counties. You must have a very in depth knowledge on cannabis laws in CA and the county you are dealing with. We have acquired properties in 2 counties for the sole purpose of developing un disturbed lands and retrofitting existing farm then leasing to cultivators. It has worked out extremely well with unbelievable returns in the 30-40% return rates not including the equity appreciation of now having secure long term tenants paying huge lease rates.
But, to get these type of returns we’ve had to obtain all the rights to EVERYTHING. The land, the permits, the plans, the inspection analysis reports from all agencies and a plethora of other entitlements that come with this venture.
We have accomplished these type of projects from concept to completion. If you have any questions please feel free to reach out we’re more than happy to help you avoid many hurdles and heartache that we have went throughout along this journey.
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