I want to get into marijuana

Investor · Millington, TN · Member since 2016 · 45 posts · 40 votes

Good evening, I have been looking around at pieces of land in West Tennessee but I am now thinking I should expand into any of the 50 states. I want to buy a parcel of land and lease it out to a company to grow pot/weed. Marijuana has been legalized in a few states and from the looks of it, it appears that 2018 will be a big year for marijuana as it is being considered as ballot items in multiple states. I am looking to see if anyone has any tips or if there is anyone who has done this before I would love to get on the phone or video chat with you. Thank you

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Chris Carson

Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes

Based on my knowledge of the industry it makes more sense to grow indoors on a large scale. Variables that impact production (lighting, co2, pests) are more easily controlled in an indoor environment. Security is also a concern given the value of the crop. Might make sense to look for a large industrial space versus a bunch of acreage out in the country. I've never done anything along those lines but I have some good friends who are involved in the industry. If you are serious about this I can put you in touch with someone who can answer specifics better than I can. Edit: Remember that marijuana is still illegal under federal law and state laws vary widely. Make sure to consult a local attorney prior to starting down that path.

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Rousner E.
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Investor · Millington, TN · Member since 2016 · 45 posts · 40 votes
8y
Ron Brady I want to buy a parcel of land and build a greenhouse and then rent it out to a grower. If you don’t mind explaining, why would it be risky to lease out land to a grower and why would it require me to be actively involved. I was thinking this would be a very passive investment because I figured the grower would be responsible for following regulations similar to a farmer. Am I wrong about this?
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
8y
Originally posted by @Rousner E.:

Ron Brady I want to buy a parcel of land and build a greenhouse and then rent it out to a grower. If you don’t mind explaining, why would it be risky to lease out land to a grower and why would it require me to be actively involved. I was thinking this would be a very passive investment because I figured the grower would be responsible for following regulations similar to a farmer. Am I wrong about this?
The feds aren't going to seize your tenant's Lease.
If they seize anything it's going to be your land.
Gimer Law516 Reviews
Website View Page
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
8y
Originally posted by @Richard Anderson:
It's interesting these threads around crop cultivation/land leasing keep popping up. One of the practical issues anyone involved in the marijuana industry faces is banking. The vast majority of banks do not want any exposure to the potential legal risks involved and actively pursue the termination of any accounts related to marijuana. It does not matter if pot is "legal" in a state as several people have pointed out in this thread it is still illegal federally. Most banks have federal regulators or are in a correspondent banking relationship with nationally chartered banks. They will not risk the legal ramifications of banking anyone involved in the industry. And of course if anyone attempts to mask the origin of their funds, especially cash, they are headed down the road of violating BSA/AML regulations.
The city of LA is setting up proposals to start the Bank of LA to handle this banking front. I read they expect 100 mil in taxes annually just for LA city. It is possible we on are the last legs of political prohibition sooner than later.
Some cities in CA have approved zoned areas and some less populated desert cities I understand are making a play as well. In those locations with zoned buildable lots with water and power were 20k and now 1 mil +.
I guess Jan 1 2018 the race starts in CA.
The LA Times has a business section article about once a week on all this it seems.
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Joseph M.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
8y
@Matt R. In the episode of 'The Profit" on CNBC that focused on marijuana they mentioned how the marijuana business really helped some of those desert cities. Pretty interesting.
Daily news also links to a news site called the Cannifornian about the CA marijuana business and scene.
http://www.thecannifornian.com/
Also I have heard about the city of L.A thinking of starting their own bank. But considering how the city is run I'm not sure i'd want to keep my money in that bank.
The city controller recently warned that the city is "tight on funds".
http://www.dailynews.com/2017/10/11/la-is-tight-on...
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
8y
Originally posted by @Joseph M.:
@Matt R. In the episode of 'The Profit" on CNBC that focused on marijuana they mentioned how the marijuana business really helped some of those desert cities. Pretty interesting.
Daily news also links to a news site called the Cannifornian about the CA marijuana business and scene.
http://www.thecannifornian.com/
Also I have heard about the city of L.A thinking of starting their own bank. But considering how the city is run I'm not sure i'd want to keep my money in that bank.
The city controller recently warned that the city is "tight on funds".
http://www.dailynews.com/2017/10/11/la-is-tight-on...
Yeah, one desert city approved 10 square miles for example. It is going to boom values and create jobs no doubt.
I think LA realizes this is so much tax revenue they want it all deposited in auditable accounts just like all the other businesses they tax.
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Jennifer Slaughter
Real Estate Agent · Fort Collins, CO · Member since 2016 · 246 posts · 142 votes
8y
@Rousner E., not too long ago an investor was on BP talking about doing something along the lines of buying the land and leasing it to growers, something along the lines of what McDonald's does with it's franchisees. Anyways, it might be in your interest to do a search in the forums to see if you can find him or other investors. I'm pretty sure there is a conference for cannabis investors as well.
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Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
8y
Feel free to reach out if you have some questions on the taxation. That is a very large topic and could easily change your mind on jumping into it.
[email protected]224-381-2660
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Bettina F.
Investor · Post Falls, ID · Member since 2016 · 606 posts · 699 votes
8y
Decreased IQ, higher incidence of schizophrenia, gynecomastia, decreased sperm counts, auto accidents. Just wait until the product liability claims start rolling in.
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Ron Brady
Investor · Saint Joseph, MI · Member since 2016 · 12 posts · 5 votes
8y
@Rousner E. you can probably find a grower to lease a piece of property, if you can go for it. The risk for the grower would be as @Tom Gimer mentioned "If they seize anything it's going to be your land." I know the client that I'm working for is going to have about a million dollars worth of equipment, if the Landlord doesn't pay his taxes or gets sued and doesn't have their business structured properly he's going to have to relocate.
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Account Closed
Rental Property Investor · Portland, OR · Member since 2016 · 3 posts · 1 vote
8y
Your looking to own the warehouse/green house and rent to someone with a licensed grow op. First you should decide if your warehouse/green house is in a competitive market for production. Denver Washington oregon California Nevada amongst others all have popular real estate for the market. Portland warehouses are highly in demand for growers now as the space is limited. With the right tenant they will want to build out their grow op so they are just looking for the right size space with zoning to build. Electric is a huge deal, you can’t supply a grow if your sharing power with 5 neighbors hogging the transformer. Beyond that there’s the type of grow your renting to, wether it’s medical marijuana or recreational make sure they have a business plan and proper licensing in place prior to move in. I would focus on warehouse space over acreage, the industry isn’t about fields of green it’s about green rooms that look like science labs and engineered/cloned and cycled marijuana crops. Why harvest a field twice a year when you can harvest 6 times a year in a warehouse. Your thinking on the right track imo...
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Matt R. I would remind anyone thinking about doing this kind of banking that is a crime for a bank employee not to report any transaction they believe is related to a crime. For more information they should refer to
https://www.ffiec.gov/bsa_aml_infobase/pages_manua...
I also believe there is still a reward of up to 20% for anyone reporting a bank for not reporting suspicious activity.
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Bettina F. If we are going to talk about the health effects then you should mention delta-9 THC is one of the best known triggers for psychosis in people with bipolar disorder.
If there is going to be a lawsuit that is most likely to be the related illness. It tends to have onset within hours or days. The conditions you mentioned are much more long term.
If anyone wants to argue about it, they should read the NIH material on the topic. They should also know the civil courts will certainly believe the NIH over anything you say.
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
8y
Originally posted by @Account Closed:

@Matt R. I would remind anyone thinking about doing this kind of banking that is a crime for a bank employee not to report any transaction they believe is related to a crime. For more information they should refer to
https://www.ffiec.gov/bsa_aml_infobase/pages_manua...
I also believe there is still a reward of up to 20% for anyone reporting a bank for not reporting suspicious activity.
I am sure the city of LA , who would start a city government bank, is aware of those conflicts. There are still USA counties where alcohol is illegal. Culturally speaking it is mostly game over in CA, politically who knows?
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Matt R. Here is a questions. Why would a person work at that bank with the risk of arrest? If you say because they will pay more because of the risk then the federal courts will lock the people up all day long for money laundering.
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Joseph M.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
8y
Just heard an ad on L.A radio today about some company talking about investing in the marijuana industry Green rush . Kind of like one of those make money flipping houses ads . "Make money in the marijuana industry!"
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
8y
Originally posted by @Account Closed:

@Matt R. I would remind anyone thinking about doing this kind of banking that is a crime for a bank employee not to report any transaction they believe is related to a crime. For more information they should refer to
https://www.ffiec.gov/bsa_aml_infobase/pages_manua...
I also believe there is still a reward of up to 20% for anyone reporting a bank for not reporting suspicious activity.
2014 there were 11 totally dry Texas counties and 4 who just allow beer. Perhaps a few banks reported suspicious activity on deposits or that is all cash in the banjo can maybe?
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Matt R. I have no idea why you want to talk about 2014 but in that year $4,474,000,000 in criminal proceeds was seized by the federal government.
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
8y
Originally posted by @Account Closed:

@Matt R. Here is a questions. Why would a person work at that bank with the risk of arrest? If you say because they will pay more because of the risk then the federal courts will lock the people up all day long for money laundering.
Those are good questions. I have no idea and I suspect California mostly and or LA will be a part test tube proving ground and answer some of those cities or states banking concerns. My take is in CA, the die is cast favoring aggressive taxation moving forward. We can look back to previous prohibition reforms and maybe see where it might go geoghrapically from there. Consider CO, WA, OR, CA, NV? are in full blown adult legal stages and half of the other states in a form of that.
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Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Matt R. Or tomorrow someone could walk into the oval office and explain to the President Trump they just took enough money to pay for a border wall.
There are people from Texas that have had their assets taken because of marijuana issues. Basically all of them are raising equal protection claims. The Justice Department has made it clear in repeated court filing that they do not have a policy not to seize assets in states that claim to have "legalized" marijuana.
So at any moment, they can do it.
Pop quiz how many states that have "legalized" marijuana voted for Trump in the last election?
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
8y
Originally posted by @Account Closed:

@Matt R. I have no idea why you want to talk about 2014 but in that year $4,474,000,000 in criminal proceeds was seized by the federal government.
That was the most recent dry county stuff I found. I am sure one can find more recent dry info and maybe most don't realize dry counties actually still exist. I remember my parents looking for red wine in Utah on a Sunday, and a Forest Ranger delivered that in the 70s.
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Fred Heller
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
8y
With the current hostility in DC regarding state laws legalizing MJ, I would stay as far away as possible.
1 Reply
Erik M. Rivera
Rental Property Investor · Calabasas, CA · Member since 2017 · 6 posts · 2 votes
8y
A good friend of mine is a Real Estate attorney who specializes in this exact niche. He practice both in California and Washington State, where it’s legal. Message me if you’d like me to connect you. -Erik
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Chris K.
Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
8y
@Rousner E.
You'll need to narrow your focus to a specific state. There are so many different regulations in this area of law that it's impossible to give you a good answer without knowing which state you are in.
Also as others have mentioned, there are some serious conflicts between Federal Law and State Law on this topic. My guess is that eventually Federal Law will go towards the path of legalization. But you need to be ready to face the possibility that the DEA just comes in and seizes all your goods and money. Not sure how often it happens nowadays, but it was definitely an issue with growers in CA for many years. The real old schoolers literally used to bury money in odd locations to avoid seizures.
Because of these challenges, getting into the marijuana industry is generally not cheap. I know several folks that entered the medical marijuana business in various states. Most of them had the ability and willingness to drop a million (or more) to finance their projects. And even for those folks, they all recognize that they most likely will not be able to compete with the mega-corporations once they are comfortable entering into this realm. Imagine, for example, what will happen if tobacco companies enter this market.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.
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Fred Heller
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
8y
@Matt R. Thanks for the memories. That little blue speck on the northeast corner of Texas is Bowie County, which includes Texarkana, where I grew up. The city is split down the middle by the state line. Arkansas was wet, and State Line Avenue was, and is, lined by tons of liquor stores. And I guarantee you a lot of their business comes from the other side of the state line.
When I was in high school in the 70s, the drinking age in Texas was 18, but in Arkansas, it was 21. So we had to drive south to the neighboring county to buy our hooch. And right there on the county line was this little town called Domino. Couldn't have been more than 50 residents. But there was something like 20 liquor stores in that town.
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Dustin Frank
Real Estate Agent · KS · Member since 2017 · 157 posts · 71 votes
8y
I have clients that include Dispensary owners, growers, extractors, consultants and product wholesalers. I would be happy to meet with you in person or over Skype if you have additional questions.
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