Medical marijuana has been newly allowed in various states, such as Missouri. However, due to the fact that cannabis is still illegal at the federal level, no Missouri licenses for cannabis growing, sale, or processing have been granted. What is more, those who would like to get their foot in the door now, by buying or renting real estate in strategic locations, are having trouble getting loans and titles. Here is how the whole mess works.
Banks and Title Companies Hesitate to Work with Future Cannabis Companies
Even in states like Colorado, where full recreational cannabis is legal, cannabis companies have had a hard time getting bank loans or even storing their cash in banks at all. The same problem is cropping up in Missouri, where banks are largely unwilling to underwrite loans for cannabis businesses. Title companies are similarly cautious, for fear of running afoul of federal money laundering laws and other infractions.
As such, many of the cannabis companies preparing to vie for business in Missouri are doing so on properties that are already owned by the ventures. Others are buying up real estate with cash. Even then, the prospect of being penalized for breaking federal laws remains.
States like Colorado have obviously proven that there is a massive market for high-quality, regulated cannabis. As such, there is a great deal of money to be made. Those who can handle the risk stand to make a bunch of money in the future.
The Real Estate Risk Will Go down over Time
Given time, Missouri will figure out how much risk cannabis companies pose to financial and titling companies. At that future time, it will be a lot easier for cannabis companies to get loans and find business spaces. However, by then, the greatest profit opportunities might have passed, so those in search of the first tidal wave of industry profits might want to take their chances in the coming months, not years.
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