Name: What Businesses, Landlords, and Real Estate Pros ‘Partaking’ in Minnesota Cannabis Industry Need to Know | Finance & Commerce
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What Businesses, Landlords, and Real Estate Pros ‘Partaking’ in Minnesota Cannabis Industry Need to Know | Finance & Commerce

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Skip to contentSponsored ContentHomeNewsSponsored ContentTo readers: Sponsored columns consist of paid content from companies and organizations that have information and opinions to share with the business community. They do not represent the views of Finance &amp; Commerce. Columns are accepted on a variety of topics and are subject to approval by Finance &amp; Commerce management. To contribute contact Bill Gaier at 612-584-1537.By Jason A. Lien &amp; Carly J. JohnsonMinnesota’s recent approval of the use and sale of adult-use cannabis will no doubt alter the landscape of commercial real estate in Minnesota. Business owners, commercial landlords, and other real estate professionals planning to engage in this burgeoning industry should apprise themselves of anticipated timelines, zoning issues, and special considerations for lease agreements under the new law—as well as local governments’ resulting regulations.No recreational cannabis sales under the new law will be permitted until the state Office of Cannabis Management (OCM) is established and begins issuing licenses, likely not until January 2025. Meanwhile, the new law gives cities flexibility to implement interim moratorium ordinances through Jan. 1, 2025, prohibiting cannabis businesses.In other words, even if the OCM were able to start issuing licenses soon, many cities may still prohibit cannabis-related businesses from opening until Jan. 1, 2025. Cities like Woodbury, Mankato, Eagan, Brooklyn Center, East Grand Forks, West St. Paul, and Stillwater have taken full advantage of this flexibility and instituted moratoriums through Jan. 1, 2025, to allow time to study and analyze what is needed in a future ordinance.Other cities may start establishing city regulations that will allow for a cannabis business to open as soon as the OCM begins issuing licenses. Notably, stores opened under the previous hemp/CBD law will be allowed to continue in the interim.Just as cities differ on when to start allowing adult-use cannabis sales under this new law, they will also differ on what regulations they may impose.Minnesota cities are allowed to limit the number of licensed cannabis retailers to no fewer than one for every 12,500 residents—a parameter set by the new statute. Alternatively, if a county has one active registration for every 12,500 residents, a city or town in that county is not obligated to register a cannabis business. As a result, individuals and entities interested in opening cannabis retail stores should consider acting fast to secure locations in key cities that may limit the number of cannabis retailers in their jurisdiction.Further, Minnesota law allows cities to prohibit cannabis sales within 1,000 feet of a school or 500 feet of a day care, residential treatment facility, and public park—much like how local governments treat adult film stores. It is possible that for some cities, these restrictions may severely limit the number of commercial district spaces that are eligible to become cannabis retailer spaces.The effects of this industry are yet to be seen, but it is expected to boom, so commercial real estate located in these areas may see a bump in land value as cities begin limiting where cannabis retailers may operate.Where cannabis retail is allowed, commercial landlords should consider how to best tailor lease agreements to meet the needs of this unique industry.Landlords of commercial properties who may be approached by cannabis retailers should consider contingent planning in their lease agreements for the benefit of both the landlord and commercial tenant. This could include making a lease contingent on obtaining and maintaining necessary licensure and city permitting. Contingent planning in lease agreements allows for greater flexibility if the business is unable to obtain or maintain necessary licenses or permits, and thus unable to pay rent.Another consideration for landlords of commercial properties who are considering renting to a cannabis retailer is the allocation of responsibility for required building mechanics. The new Minnesota law requires cannabis retailers to have ventilation and filtration systems, indoor and outdoor lighting, and a security plan to prevent theft, among other requirements. Specifying in the lease agreement which entity is required to maintain such systems may help prevent future disputes.Further, landlords may also want to consider specifying if smoking is allowed on the property. Generally, cannabis businesses are not allowed to “permit an individual who is not an employee to consume cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products within its licensed premises unless the business is licensed to permit on-site consumption.” Relatedly, many cities are regulating cannabis use, which equally may vary amongst cities, but can be as restrictive as limiting cannabis consumption in all public spaces, like a parking lot.We encourage all business owners, commercial landlords, and real estate professionals to keep abreast of local regulations pertaining to the new cannabis law.About the Authors: Jason Lien and Carly Johnson are attorneys at Maslon LLP. Jason’s practice focuses on representing clients in the construction, real estate, financial services, and railroad industries. Carly assists clients across a broad range of commercial litigation matters, including construction, real estate, and trust and estate litigation.The pandemic and rising interest rates have clouded construction financing and t[...]August 31, 2023One thing is clear: We can’t talk about the future of commercial real estate w[...]July 21, 2022To readers: Sponsored columns consist of paid content from companies and organiz[...]June 6, 2022Share this!Sign up for your daily digest of Minnesota News.This fall alone, 44 districts are seeking voter support for everything from security and technology [...]Hermantown plans to transform a 120-acre site west of the Duluth International Airport into a new bu[...]New industrial buildings delivered in the wake of COVID-19 are pushing up vacancies in the Twin Citi[...]After 15 months of construction, a new pavilion is about to debut on the shores of Bde Maka Ska in M[...]The University of Minnesota is laying the groundwork for future building improvements at the Hormel [...]The Design-Build Institute of America encourages design-build entities to support full and[...]This website uses cookies to improve your experience while you navigate through the website. 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Skip to contentSponsored ContentHomeNewsSponsored ContentTo readers: Sponsored columns consist of paid content from companies and organizations that have information and opinions to share with the business community. They do not represent the views of Finance &amp; Commerce. Columns are accepted on a variety of topics and are subject to approval by Finance &amp; Commerce management. To contribute contact Bill Gaier at 612-584-1537.By Jason A. Lien &amp; Carly J. JohnsonMinnesota’s recent approval of the use and sale of adult-use cannabis will no doubt alter the landscape of commercial real...

What Businesses, Landlords, and Real Estate Pros ‘Partaking’ in Minnesota Cannabis Industry Need to Know | Finance & Commerce

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