Medical Marijuana Archives · INCLINE LAW GROUP LLP

Leases and Medical Marijuana Tenants

March 15, 2018
Cassell von Baeyer
Incline Law Group, Real Estate / Real Property
0 Comments

The State of Nevada legalized the use and cultivation of medical marijuana in 2014 and began allowing cannabis businesses to operate in 2015. While California voters approved the use of medical marijuana some two decades ago, California law makers only put into place a regulatory scheme in 2015 thereby allowing dispensaries to operate legally.

Medical Marijuana and Leases

Cannabis law is currently a very fluid and rapidly changing area of law. The legalization of medical marijuana at the state level presents significant conflicts with federal law in numerous areas including drug policy, banking laws, criminal law and so much more. Under federal law, the use, cultivation and sale of marijuana – medical or not – is illegal. As a result of the past war on drugs, federal law provides some very severe penalties for violations of federal drug law, including forfeiture.

The federal government does have the right to seize property used in the cultivation, manufacturing or selling of cannabis. This can include real property where the owner of the real property is merely a landlord who does not participate in the cannabis business. While the federal forfeiture laws do have an “innocent owner defense” many state cannabis laws require the lease to specifically state that the lease is for purposes of cultivation, manufacturing or selling.

As noted above, this is a rapidly changing area of law. Just two days ago (October, 2015) the Federal District Court for the Northern District of California issued a ruling (a somewhat scathing decision, in fact), based on the 2015 Appropriations Act, halting the Department of Justice from expending funds to enforce federal laws that interfere with state laws that authorize the use, distribution, possession or cultivation of medical marijuana.

Until the conflict between the state and federal laws governing the use and sale of marijuana are entirely resolved, providers of services, goods and property, including landlords (both commercial and in some cases residential) are advised to seek legal counsel and to address new contract and lease provisions such as “escape clauses” and stated compliance with state cannabis law.

(this post was originally published in 2015)

MEDICAL MARIJUANA DISPENSARIES TO OPEN SOON IN NEVADA

By Jeremy L. Krenek, Attorney, Incline Law Group

The legalization of marijuana has become a hot topic over the past decade as campaigns to legalize have gained serious support. States like Colorado and Washington have legalized marijuana for recreational use. Currently, 22 states, including Nevada and California have legalized marijuana for medical purposes if prescribed by a licensed physician. While Nevada passed its first medical marijuana law in 2000, it just recently passed a law (2013) allowing for medical marijuana dispensaries to open causing great debate.

Opponents of legalization are concerned with increased crime rates, increased substance abuse among both adults and adolescents, and a potential increase of dangerous drivers on the road (DUIs). Even though there are numerous states that have legalized medical use of marijuana, it is still too early to tell whether these concerns will actually come to fruition.

On the other hand, proponents are concerned because, while marijuana may be legal at a state level in some circumstances, it is still a federal crime. Since federal law preempts conflicting state law, those who have a medical marijuana card issued by a state can still be arrested and charged with a federal offense. This example has been on display for the entire nation to witness over the last couple of years in California where the federal government has made it a priority to crack down on an over billion dollar a year pot industry.

While both sides of the debate may have legitimate concerns, Nevada residents should take comfort in the fact that Nevada is familiar with regulating a product that not everyone wants to see legalized. Nevada has a regimented process for approving gambling licenses across the state. Many of the same guidelines will likely be utilized when it comes to marijuana dispensaries. Strict guidelines regulate those who can open a dispensary as well as oversee their management. The application process for opening a dispensary has numerous guidelines and checks that must be followed carefully in order to have an application considered. Counties also have the ability to impose further restrictions and guidelines including regulations as to where dispensaries can be located within each county.

Those with the goal of opening a dispensary have many legal hoops to jump through. Only time will tell the effect legalization of marijuana will have on our nation. Until then, hopefully the rules and regulations that are in place will help circumvent any negative effects the new legislation will have across our nation.