Should I lease to a CBD retail store tenant?

[Lily W.]

Hi BP,

I have been getting multiple potential tenants inquire about renting my commercial space for a CBD retail store. (Unincorporated LA)

I wanted to get any insight on lease terms in regards to any restrictions to include and if there's any issues or additional considerations I should consider?

Currently from my research CBD is legal both Federal & State of CA.

Would love to get insights from anyone in the space or has experience renting to these types of tenants.

Thank you

[Dominic Mazzarella]

Quote from @Lily W.:

Hi BP,

I have been getting multiple potential tenants inquire about renting my commercial space for a CBD retail store. (Unincorporated LA)

I wanted to get any insight on lease terms in regards to any restrictions to include and if there's any issues or additional considerations I should consider?

Currently from my research CBD is legal both Federal & State of CA.

Would love to get insights from anyone in the space or has experience renting to these types of tenants.

Thank you

Even with CBD being federally legal, you’ll still want to be extra clear in your lease. Make sure it restricts illegal activity under federal, state, and local law just in case regulations shift.

Also, check if your insurance carrier is okay with CBD retail tenants. There’s a really good chance they won’t like it. Which isn’t the end of the world, as there are multiple insurance carriers who will support this. But you might have to shop around a bit for the right carrier and it might make your premium go up. 

Also, if you have a loan on the property, your lender might have their own restrictions. So it’s worth running it by them if the property has a loan on it.

If everything lines up, you might want to include lease language around signage, odor control, and customer traffic just to avoid any potential headaches.