EXERCISE CAUTION WHEN BUYING A FARM FOR A MARIJUANA BUSINESS
On behalf of Michael Brooks of Law Offices of Michael A. Brooks posted in land use & zoning restrictions on Wednesday, April 4, 2018.
There are a lot of tricky issues when it comes to setting up a marijuana business — not the least of which is finding a location where the zoning isn’t a problem.
Some eager entrepreneurs are hoping that they can buy and convert a family farm to their needs. However, you need to exercise caution before rushing ahead with a purchase. These are some of the biggest questions you need to ask first:
Do you have a contingency plan if the local jurisdiction won’t play along?
Commercial agreements usually have a contingency clause that allows you to back out of the deal if the local governments won’t fit the marijuana business under the property’s zoning. The agreement to purchase a family farm, however, is much the same as the agreement to purchase any other home. Without adding a contingency clause to your contract, you could be stuck with a property that’s unsuitable for your needs.
You can’t rely on how the farm has been used in the past to predict how it can be used in the future — especially for marijuana businesses and/or farming.
Could federal laws be a problem?
Because marijuana is still illegal at the federal level, you could run into potential problems with civil forfeiture laws. You could lose your home in addition to the business if you plan on moving into the farmhouse. You can also run into problems with conservation easements. If the federal government is providing a local jurisdiction with extra funding tied to agricultural restrictions, allowing you to operate could endanger those funds. A jurisdiction could step in and stop your operation in order to protect its own finances.
How do the neighbors feel about the proposed business?
Nuisance laws generally don’t stop a farm from operating — except when it’s a marijuana business. The pungent odor of the plant is sometimes a problem for neighbors. In addition, there’s often a fear that a marijuana business will bring in “unsavory” characters seeking to make a quick buck by theft.
Marijuana businesses do have the potential to be quite profitable, but it takes some careful negotiations to make sure that you get off on the right foot with the land-use and zoning restrictions. If you’re unsure about the particulars, it’s usually wise to get some experienced legal assistance.