There was a time not very long ago that property owners were extremely wary of renting space to any type of marijuana business, for fear of running afoul of the federal government. Specifically, 18 U.S. Code Section 981 details the government’s authority to assert civil asset forfeiture. The law was drafted to allow the government to seize the massive assets acquired by drug kingpins. However, it was rarely used until marijuana became legal as medicine in California. At that point, federal prosecutors began going after property owners who allowed their site to be used by any marijuana operation – even if it complied with state law – because marijuana was (and still is) unlawful per federal statutes.
Today, it’s a much different legal landscape. Technically, prosecutors still have the authority to assert civil forfeiture, but the U.S. Justice Department under the previous presidential administration altered its policy in 2013, with a memo indicating that so long as operations were compliant with state laws, the federal government wouldn’t pursue them unless it had some special reason to do so (i.e., distribution of marijuana to minors, preventing sales revenue from being funneled to criminal enterprises and cartels and preventing dissemination of the drug to states where it isn’t legal).
This has motivated a growing number of real estate investors to dip their toes into the waters. The Portland Press-Herald in Maine recently reported real estate brokers are encountering increasing demand for industrial spaces that could be converted to indoor marijuana farms. News of this comes as Maine is on the verge of being yet another state to approve of recreational marijuana. California is in that same boat. Continue reading