Recently, I had the opportunity to moderate panels on cannabis and commercial real estate at programs held in Los Angeles and Chicago.  I won’t say it was the best of times or the worst of times, but I will say “it was the age of wisdom; it was the age of foolishness.”

It was interesting to compare the programs and the audiences in the two cities.  In Chicago, where medical marijuana has been legal since 2014, and recreational marijuana has been legal for just over a month, people from many facets of the real estate industry — brokers, architects, contractors, real estate owners — came to learn about the new opportunities and pitfalls of the cannabis industry.  To be sure, some were experienced, having participated in the medical marijuana business, but others were, well, naïve about how pervasive local, state and even federal laws are in regulating cannabis use of commercial real estate.

In LA, where medical marijuana has been legal forever and recreational for three years, the commercial real estate industry has had enough experience with the cannabis industry to experience the impact of various laws and regulations on commercial real estate.  The audience came prepared to hear about how the cannabis and commercial real estate industries were addressing some of the issues resulting from the intersection of the industries.

Here are some key takeaways from the two panels:
Continue Reading Tale of Two Cities: Cannabis and Commercial Real Estate

There is a segment of the investment community that wants to invest in the cannabis industry in the worst way, and that is exactly how some are doing it.  Over the past several months our firm has reviewed a number of private placement memoranda (PPM) for clients, and while some appear to be solid and well written, others remind us of the early days of the internet boom when business plans were sometimes written on napkins.  Deficiencies we have found in PPMs include confusing descriptions of business plans, lack of financial projections, lack of basis for valuations, inadequate disclosure of risk factors and vague discussion of management compensation and/or equity holdings.

If you are planning to invest in a cannabis company, here are a few factors that you should consider before making a decision.
Continue Reading Invest in That?? What are you Smoking??