This is how Legalized Marijuana can interrupt your lease

In Colorado and many other states, we distinguish between Medical Marijuana or MMJ and Recreational Marijuana or RMJ.

There is a third category, too, which I call IMJ or Illegal Marijuana. Some refer to it as “street” or “Black Market” Marijuana, which does not get sales taxed by the State of Colorado and local municipalities to the tune of 2.9% (MMJ) to nearly 35% (RMJ). Legalization certainly has not driven out IMJ as many people predicted would occur.

In Colorado commercial real estate circles, we discuss short-term issues such as how MMJ and RMJ businesses have driven up lease rates and selling prices on certain product types, particularly Office/Warehouses for MJ Grow Facilities. But it’s old hat now.

Out of political correctness, we don’t talk much about the bigger picture. I surmise that it’s because we are fearful of ticking off our neighbors and business colleagues. Some, though, now have second thoughts about legalizing Recreational Marijuana due to the unintended consequences becoming clearer with the passage of time. Nevertheless, the legalization of MMJ and then RMJ is coming to more and more states.

Personally, in the spirit of full disclosure here, I am OK with MMJ for legitimate, compassionate medical uses and in 2000 I voted for it in Colorado. However, that is not what we ever had in Colorado, certainly not once “The Green Rush” started roaring in 2009.

Nope, we had “Checkbox h” or “Checkbox 8” that allowed doctors to write MMJ Permits (not prescriptions) for “Severe Pain”. Over 95% of all MMJ Permits were and still are written for this reason. Take a look for yourself here at the Physician Certification that is required by the State of Colorado’s Medical Marijuana Registry.

What’s happening in your state about legalizing Marijuana, either MMJ or RMJ? Get ready because what happened in Colorado may be coming soon to your neighborhood strip centers, downtown and industrial parks.

Are Corporate and Commercial Real Estate Professionals in your city openly discussing MMJ or RMJ yet? They should.

Or is there a wary political correctness about even broaching this subject?

I’ll note, too, that our residential loft in the Ballpark Neighborhood near Coors Field in Downtown Denver was located next door to one of Colorado’s first MMJ Dispensaries, which included an MMJ Grow Facility, since the building had the proper Industrial Zoning. From that personal experience, I learned quite a bit about this subject.

Our company, MacLaurin Williams, has developed a unique Lease Exhibit to protect our Office and Industrial clients to prevent their Landlords from leasing vacant space in their multi-tenant buildings to MMJ and RMJ-related businesses, as well as to court-ordered drug and alcohol testing centers. Ask me if you’d like to have a copy.

So what are the issues that our Clients have actually faced with MMJ and RMJ businesses and court-ordered drug and alcohol testing centers?

• Security concerns, since MMJ and RMJ businesses are still all-cash operations due to federal banking rules.

• Strong MJ odors and even mold that can permeate not only the indoor air but even vehicles parked nearby.

• Incompatible, less than professional images, exacerbated by differences in clientele and sometimes their unbusinesslike behavior.

• Conflicts and lease issues that arise over “quiet and peaceful enjoyment” of a Tenant’s Premises.

• Overuse of building parking lots.

• Some Property Managers and Landlords’ reluctance to enforce their building rules and regulations on non-compliant Tenants.

Not every Colorado business, professional firm, non-profit organization or government agency takes an official position on their employees’ use of MMJ or RMJ. However, very few of them seem to want MMJ or RMJ businesses or court-ordered drug and alcohol testing centers as neighbors in their Office, Industrial or Retail projects.

Contact MacLaurin Wiliams and William Gary, MBA, MIM, at cell +1 303-901-1108, office +1 512-614-5883 or wgary@MacLW.com to confidentially discuss your leasing needs and any questions you might have about Marijuana businesses as neighbors in your building or neighborhood. We have helped a number of Clients to deal successfully with these real life issues.

As 100% Tenant Representatives and Tenant Advisors, MacLaurin Williams Worldwide and our offices can advise you in nearly eighty (80) major markets, including in Denver/Boulder, Colorado, and Austin/Round Rock, Texas.