By Jeffrey L. Wax, AEGIS Law (jwax@aegislaw.com)
Securing the location for your cannabis-based business is one of the most important boxes to check when setting up your medical marijuana dispensary, manufacturing facility, or cultivation facility. If you haven’t secured a location yet, you need to quickly.
Missouri requires applicants to state whether they have “a legal right to occupy the premise at the proposed location.” Regulators are looking for whether an applicant owns the property, has an option to buy, or has a lease in place. They also want to see building schematics or designs. Some key questions to ask are:
- Distance Requirements – Has the municipality in which you are interested in locating shortened the distance requirement between your facility and any schools, churches, or day cares? By default, the distance is 1000 feet, but some municipalities have shortened it. (For example, Kansas City = 750 ft. for manufacturers, 300 ft. for dispensaries; Creve Coeur = 300 ft.; Springfield = 200 ft. (with limitations); City of St. Louis = 0 ft. St. Louis County (unincorporated areas) is considering a 300 ft. requirement.)
- Other Municipal Requirements – Has the municipality adopted zoning restrictions or other restrictions such as requiring facilities to be a certain distance from each other and/or limiting the number of facilities that can be located within the municipality?
- Economically Distressed Areas – Is the proposed site in an economically distressed area? Missouri regulators will award bonus points to applicants seeking to locate in zip codes with an employment rate of less than 90%.
- Geographic Dispersal – Is the proposed site geographically dispersed from other proposed facilities? Missouri regulators will also award bonus points to applicants located in different state house districts and to applicants located more than 25 miles from the nearest other applicant.
Leasing Terms – Many applicants are choosing to lease their property rather than buy because they do not know if they will be issued a license. Ask yourself:
- No Mortgage – Does the landlord have a mortgage on the property? Leasing to a cannabis business could violate the terms of the mortgage and result in the lender calling the landlord’s note.
- Early Termination – Can you terminate the lease early if you do not receive a license?
- Staggered Rent – Must you start paying full rent immediately, or can rent be reduced pending issuance of a license?
- Permitted Use – Is a medical marijuana business a permitted use under the lease? (Remember, although medical marijuana businesses are legal under Missouri law, they are still illegal under Federal law.)
- Insurance – Will a medical marijuana business violate the landlord’s insurance policy? Can you and the landlord both get insurance that will cover state-authorized cannabis businesses?
- Cash Payments – Is the landlord aware that rent will likely be paid in cash, and will you receive receipts for payments made?
- Signage and Security – Missouri’s cannabis laws and regulations contain detailed requirements for signage and security. Will the lease allow you to comply?
It’s crunch time! Applications for all medical marijuana facilities are due on August 17, 2019. It’s not too late to ask for help.
