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Zoning/Use
In considering the location and permitted use at a property, a purchaser needs to ensure that they will be able to use the property in the way that they intend prior to entering an agreement. A purchaser’s solicitor must determine whether the zoning of the prospective property allows for the purchaser’s intended use, or if there are any municipal by-laws that would prohibit the purchaser’s intended use.
For example, if a purchaser is looking to purchase a property to use as a production facility, the property will need to be zoned accordingly. It would be very unfortunate if a purchaser found a perfect space for a production facility and it being zoned for a use that precludes that purchaser from using the space to produce cannabis.
Another example is in the retail context where considerations of municipal requirements is at the forefront of the licensing process. Each province has set its own buffer requirements for the location of stores. Ensuring that municipalities have not prohibited the presence of cannabis retail, and ensuring proper distances are maintained from schools, places of worship, etc. is of the utmost importance. The last thing a purchaser would want to do is spend more money and possibly multiple years fighting a municipality to get a property rezoned after spending potentially millions of dollars purchasing a property.
Financing
A purchaser of course will need to come up with funds to pay for any property. In most real estate transactions, a purchaser receives financing to help pay for the purchase of the property. Typically, purchasers will look to the banks, and/or to private lenders for financing.
Traditionally, banks and top tier private lenders were hesitant to involve themselves with the cannabis industry. While times are certainty changing and both banks and private lenders have started to enter the world of cannabis debt financing, involvement in or use of a property for the purpose of involvement in the cannabis industry will often be a hurdle for purchasers, compared to a more “typical” industrial or commercial purpose.
As a result, as soon as a prospective purchaser decides to move forward, the best course of action is for that purchaser to start working on obtaining financing right away, so as to not hold up the purchase and obtain a favourable rate.
The above are just three (very important items!) a purchaser of a cannabis related property must keep in mind as they consider making a purchase. It is important that prospective purchasers contact a solicitor to assist through the purchasing process to ensure they are protected.
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