Robert Schiappacasse, co-chair of the Corporate Department at Sills Cummis in Newark, has been around the cannabis sector long enough to remember how challenging the real estate component used to be for potential entrepreneurs. It seemingly stopped many before they could even get started.
When the industry in the state was only medicinal — and you needed to have your real estate secured before you could apply for a license — potential startups were at the mercy of landlords.
"Landlords really took advantage of the opportunity, because you couldn't apply for a license unless you demonstrated what the regulations called 'control of the real estate' — and you could only demonstrate control under the original medicinal regulations by either having a firm contract to purchase or a firm lease to occupy the space," he said.
"This put landlords in a position where they could charge exorbitant upfront, non-refundable deposits — and they could insist you commence paying rent almost immediately. And because there were a few locations and it was a much smaller market, it really put a tremendous strain on anybody who was applying for a license."
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