Author: Kevin Davis
As Luke discusses in his blog post "Home Sweet Home," the Rebound team is excited about being in our own space, closer to home. And while the move from Fort Collins to the Greater Denver area was always planned, it was far more difficult to execute than originally anticipated. Why? Weed.
While the State of Colorado reaps the financial benefits of legal marijuana, other unrelated small businesses are dealing with real estate issues. For Rebound, this meant:
- A frustratingly long time to find a space that met our location/building requirements while being reasonably priced.
- Finding a landlord that would be open a 3-year lease or less.
- Finding a landlord that wouldn’t require a personal guarantee.
Finding a lab/office was a painful process that required significant time, patience, negotiation and legal fees for lease revisions. However, Rebound’s issues were nothing compared to other businesses in Colorado. We’ve heard stories of small businesses having their landlord triple their rent as leases expired, all to get a high paying tenant in to grow Colorado’s high priced consumer product. And this is after 10, 15 and 20 years in the same building. Most media focuses on marijuana’s positive contribution to the real estate market, but the other side of the story isn’t as often told.
The projected $125M in tax revenue from marijuana sales can really help state/municipal programs. However, there needs to be some regulations protecting non-grower businesses that also want to make/keep Colorado their home. Otherwise social spending on those left unemployed by closed businesses and company layoffs will offset the benefits gained from state marijuana tax.
My recommendation for small companies looking for real estate in Denver:
- Start your search early.
- Don’t believe your commercial agent when they say you can’t get a 3-year lease without a personal guarantee.
- Move the agents aside and set up a call with the landlord. That simple over the phone transaction will make the negotiation process much smoother.
- If provided a boilerplate lease that doesn’t address anything discussed, try to have the landlord’s attorney make the initial changes thus saving you some legal fees.