Tips for Black Entrepreneurs Looking to Purchase or Lease Cannabis Real Estate


The cannabis industry, projected to be worth $21 billion by 2021, has a significant disparity of black cannabis entrepreneurs.

A recent breakdown by MJBusinessDaily showed that only 4.3% of owners and founders of cannabis businesses identify as African American. 5.6% of those who have a stake in a cannabis business identify as African American, while only 1% of America’s dispensaries are owned by blacks.

These statistics need to change, and Growing Talent’s mission includes building up black people and minorities within the cannabis industry in order to increase our stake and presence.

One important aspect of the cannabis business is real estate. Opportunities for rental properties are booming in California with the passage of Proposition 64, as well as across the nation in the 30 medical states and 9 recreational states. Real estate purchases and rentals are going like hotcakes.

Purchasing or leasing a space is a challenging process for any entrepreneur in cannabis. Zoning, ensuring space is away from children and public spaces, and making sure the location is sustainable for business are just a few of the considerations for cannabis entrepreneurs.

A few layers are added for black entrepreneurs.

According to a 2013 report by the ACLU, black people are 3.73 times more likely to be arrested for cannabis-related reasons than white people. A recent report in Time Magazine: Marijuana Edition puts this number at black people being 4x more likely for being arrested for cannabis possession compared with whites, despite blacks and whites using cannabis at similar rates.

Too many African Americans are facing barriers to succeeding in the cannabis market, from real estate to financing, to licensing. “I think African Americans have organizational issues coupled with the fact that the USA has an agenda against having us succeed,” said Chicago lawyer William Koffie to Afro.

Needless to say, there are a few extra hoops to jump through when entering the cannabis market as a black entrepreneur. Growing Talent recognizes the disparity in representation of the black community among cannabis, and supports black entrepreneurs in all processes of their business growth, including real estate.

For black entrepreneurs, here are some important things to take into consideration when leasing or buying a cannabis property:

Prepare to Have the Door Shut in Your Face

“This is not something people welcome a lot of blacks into,” says Bryant Mitchell, owner of Blaqstar Farms cannabis grow, in East Los Angeles. “We’re the guy who’s selling it. That’s all we are, and that’s the way they look at us.”

Sadly, this is the reality for too many black people who are trying to purchase or lease cannabis retail spaces. Those who are looking to lease or buy a property for cannabis purposes must be prepared for discrimination due to the long-held bad (and false) poor associations of blacks and cannabis that go back to the Reefer Madness days.

Due to racism being a very real thing in America, it may take a few tries to get a landlord or owner who can see through cannabis’ racist past and see the potential to grow African-American involvement in the cannabis industry.

Be Prepared to Pay Top Dollar

All California entrepreneurs must be ready to pay top dollar to lease or buy a cannabis property, due to the demand, and scarcity of suitable properties on the market.

Take Lynwood, California, where cannabis-zoned industrial buildings were selling for about $107-120 per square foot. By 2018, that number had more than doubled to $300 per square foot. People who own properties are getting them zoned and ready to sell for or lease to cannabis businesses, understanding the value of what they have, and what people are willing to pay for it.

“People are land banking,” says Santa Ana cannabis real estate lawyer Aaron Herzberg.

Licensing and Permits May Break the Bank

If you have been able to lease or buy a property, also be prepared to shell out thousands to apply for a license, and for the subsequent licensing fee.

In Maryland the application fee is $8,000; the licensing fee is $80,000. In Texas the application fee is $7,356; the license fee is $488,520 (2 year period). In Philadelphia, the application fee is $5,000 while the licensing fee is $30,000, just as an example of fees across the country.

“I don’t think minorities are properly informed on what it requires to have a dispensary,” said George Allen, founder of a cannabis consulting company to Afro.

Show a Community Engagement Priority

Many owners and landlords have an investment in ensuring that the business that holds their space is doing good for the community they occupy.

Get to know your potential area and neighborhood before negotiating a space and look to see the places in your community that your business can engage. Are there local poverty initiatives that your organization can donate proceeds to? Are there local parks that can undergo an improvement project?

The sky is the limit on how a cannabis business can engage with their community, and you’re more likely to find yourself signing the dotted line if you can show you intend to give back.

Have an Escape Clause

The statistics sadly stack against black people when it comes to arrests having to do with cannabis. Protect yourself against this as best you can.

According to CannaLaw Blog, property leases that involve a cannabis business should include “escape clauses” that specifically list out federal intervention, changes in federal enforcement policy, forfeiture threats, and federal enforcement actions (such as DEA raids or DOJ criminal charges or administrative actions) as defaults that constitute lease violations. This essentially means that your business, and your lease, is protected in case the federal government comes sniffing around, or significantly changes laws that may put your landlord at risk.

This kind of clause helps the landlord please the federal government while ensuring that your business isn’t ousted due to federal intervention.

Lease and Buy with Confidence and Success

Growing Talent is here to help black entrepreneurs navigate the difficult terrain of cannabis real estate. We understand the federal and state laws that govern the purchasing and leasing of properties for cannabis purposes and are prepared to help black entrepreneurs enter the cannabis industry so enforce a definite change in diversity statistics in the industry.