Tenants who intend to operate a marijuana business must negotiate for substantial changes to the boilerplate provisions of the landlord's form lease. There are several factors to consider when navigating a new lease:
- Most leases allow the landlord to terminate the lease if the tenant violates any law. Because any business involving marijuana violates federal law, the landlord may have the right to terminate the lease at any time. Tenants should also push for the right to terminate the lease if state and local approvals to operate its marijuana business are denied or later revoked.
- Marijuana businesses do not want to end up in federal court as there is always a chance the federal court will refuse to enforce an agreement involving marijuana. If the lease is void, the tenant can lose its right to the leased premises, and, therefore, its license.
- Landlords usually retain the right to enter the premises to make repairs and to conduct inspections. If the tenant operates a marijuana facility in the leased space, however, the landlord's access right needs to be restricted. If a landlord enters restricted areas of the premises, the licensed tenant may be held responsible for the violation.
- A landlord who initially agrees to cooperate in the tenant's licensing process may get cold feet. To ensure the tenant can obtain its license, the lease should expressly require the landlord to provide all required authorization and documentation.
Negotiating the terms of a commercial lease can be tough. Call us at (248) 477-6300 if you need help.