Ultimate Guide to Winning the Cannabis Lottery: Real Estate Secrets for Finding the Perfect Property

Securing prime locations for cannabis operations is a complex matter that requires expertise and a thorough understanding of local regulations. Meilad RafieiCEO of We cana company that deals with cannabis rights, licensing and real estate brokerage, shares its insights into this complicated process.

Cannabis Real Estate Priorities

Rafiei explained that finding the best cannabis location starts with thorough research and a feasibility study to identify cannabis-friendly municipalities.

Digital mapping tools such as ArcGIS help to highlight viable properties and create a detailed property database. The next steps include conducting inspections and negotiating terms with landlords, while ensuring compliance with all local regulations.

Finding the right location for cannabis operations, whether retail or cultivation, therefore requires thorough research and strategic planning. “Identifying as many eligible properties as possible is key,” says Rafiei.

For retail, important factors are good frontage, sufficient parking and proximity to reputable shopping neighbours. “Retailers want good signage and should not be hidden away in industrial areas,” he adds.

For cultivation, priorities are shifting. Staying off the beaten track and ensuring robust safety measures are essential. However, both retail and cultivation face challenges with construction costs and timelines.

The role of digital tools and data

“We create maps that show all viable properties within a municipality,” Rafiei explains.

These maps are available through a subscription service, allowing customers to use them independently or with the help of WeCann. The maps help identify optimal locations based on zoning, demographics, and the presence of complementary businesses.

Understanding local regulations is another important aspect. WeCann develops feasibility reports that outline tax implications, operational costs and timelines for different municipalities.

These reports also include economic factors such as demographics and complementary businesses. “If a customer wants to be near a 7-Eleven, we can customize the map to highlight those specific businesses,” Rafiei noted.

Submit successful lottery applications

Winning a lottery for a cannabis license requires more than just luck. Rafiei emphasizes the importance of thorough preparation and understanding the local political agenda.

“We have filed about 200 permit applications in almost 60 municipalities. We have experienced a bit of everything in terms of politics and regulations,” he noted.

“You need a strong business plan and an operational work plan,” he advises. Community benefit plans that really address local needs can also significantly increase the chances of an application being successful.

Once a business has a building and has state approval, the next hurdle is meeting municipal requirements.

“Municipalities often require a detailed business plan, including operational workflows,” Rafiei explains. Additionally, municipalities often ask for a community benefit plan, especially in competitive licensing scenarios.

Also read: This cannabis provider is sitting on a pile of capital: 100% dividends meet returns comparable to shares

Check for good bones

Converting properties for cannabis use comes with unique challenges. “It’s usually better to find existing buildings than to start from scratch,” Rafiei said, citing post-COVID construction delays and higher costs.

However, properties with deferred maintenance can be problematic, highlighting the need for detailed inspections. For example, getting enough power in cannabis properties is a major challenge.

“Property owners may claim they have 12,000 amps, but you can’t just take their word for it,” Rafiei explained. Miscalculations can last up to 18 months. “It’s critical to double-check how power is being split and delivered to avoid unforeseen problems,” he added.

All about the legwork

Securing cannabis real estate requires a lot of work, starting with cold calling property owners who may know little about the cannabis industry. “Convincing them is part of the game,” Rafiei explains.

Building credibility often starts with educating property owners about market trends.

Understanding local dynamics is also crucial. Rather than delving into the historical context of cannabis, Rafiei focuses on current events and regulations in the owner’s city and state. “Once they realize their city council and mayor are supportive of cannabis businesses, that alleviates their concerns,” he notes.

These markets require navigating changing regulations and building local relationships. Establishing a connection through relevant, localized information helps build trust. Financial discussions are also inevitable in this process. Rafiei emphasizes the importance of clear communication about potential revenue and risks.

“Property owners take on additional risks with cannabis tenants due to federal laws,” he says. It’s essential to address these concerns while also emphasizing the financial benefits, such as increased foot traffic for surrounding businesses. “Cannabis tenants can have a positive impact on nearby retailers,” he adds, emphasizing the broader economic benefits of retail cannabis.

The Full-Time Job of Finding Cannabis Properties

Rafiei emphasizes that finding the right property for a cannabis business is a full-time job.

“You can’t just do this part-time; it requires dedicated effort,” he claims. Hiring a company like WeCann, with specialized knowledge and resources, may be expensive up front, but will save significant time and money in the long run.

As Rafiei sums it up: “Time kills deals. The right team can make all the difference.”

Read More: Brick-and-Mortar Investments Fuel Cash Flow and 11% Price Surge for This Cannabis Stock

These issues will be among the hot topics at the upcoming Benzinga Cannabis Capital Conference in Chicago from October 8-9. Join us to gain more insight into what the wave of cannabis legalization means for the future of investing in the industry. Hear directly from top executives, investors, advocates and policymakers. Get your tickets now before prices rise by following this link.

Photo: AI generated image.