Starting a cannabis company can be a tough sell when trying to raise capital from traditional funding sources. The newness of California’s industry combined with the unknown of funding a new (drug!) business leads to a level of risk unappealing to many investors. In a previous post, we’ve covered different ways you can find an injection of cash for your business. And this week, our experts have a new way to make your business more attractive: real estate.
Use Real Estate as an Investment Opportunity
There are two instances where purchasing real estate can be leveraged as an investment opportunity.
The first, most simple way? Use your real estate as a business in and of itself. Purchase a property in a green zone-compliant area that you can use to operate your business. Then, approach investors with the chance to become part owners in the building, rather than your business.
The second way is to offer a similar investment opportunity on different locations owned by your business. If you plan to open multiple locations but need to raise the capital to purchase the locations, have an investor take ownership in individual properties.
Both examples are a win-win for investors and entrepreneurs. For investors who may be wary of the risk associated with the cannabis industry, real estate is a much safer investment option. For cannabis entrepreneurs, you maintain full ownership of your business. Making an investor a part owner in your real estate rather than your business lets you make decisions as you want and grow your company with more autonomy.
Leasing vs Buying: Green-Zone Property
Does this mean you should make an effort to buy a property rather than leasing it? There are pros and cons to both options. We’ve outlined some of the biggest points to finding real estate previously on the blog. Should you have more specific questions, we’re here to help.
This is a very specific instance where our experts have found ways to make your company successful. Get more advice on how to build your business and join California’s billion-dollar cannabis industry when you consult our experts.