Every single business that wants a cannabis license in California needs to buy or lease property, because licenses are tied to properties. Cannabis businesses usually opt for leases rather than purchases given the uncertainties in getting licensed or succeeding in business, and sometimes capital constraints.

As part of the licensing process, state and local agencies require that the real estate (the premises) has certain security features and other features, which will in most cases necessitate some kind of buildout. For what it’s worth, I’ve worked with a ton of cannabis businesses and can’t recall a single time where improvements weren’t required. In this post, I’m going to look at what I believe are the seven most important issues cannabis tenants face with respect to tenant improvements.

#1 Cost

When I talk to people who want to start cannabis businesses, one of the first things I will tell them is that it’s going to cost a lot. And generally, the most expensive part of the process is the buildout. In some cases, only modest improvements are required but in the most cases major redesigns are required. We’ve seen businesses spend millions of dollars or even build facilities from the ground up.


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