The City of Albuquerque skipped proposed zoning amendments that would have severely restricted where cannabis companies would be allowed to operate in the city. But for many potential recreational cannabis entrepreneurs, finding properties suitable for growing marijuana continues to be difficult.
While the state appears to be acting in good faith when it comes to creating a recreational cannabis industry, concerns by some city leaders and even the mayor’s office in recent weeks about locating marijuana plants near the main street and residential areas have threatened to constrain space. are available in which new businesses can operate.
However, the proposed amendments were rejected by the city council, which opened up large areas of real estate throughout the city where marijuana businesses could become home. Many locations in Nob Hill and Downtown were found open and ready to operate in accordance with approved zoning regulations. But those who expected a path open for them after the zoning debate ended were disappointed to find other obstacles.
The first of these obstacles is the inaccessibility of many bank-owned properties. Some banks consider it too risky to work with cannabis companies. In an interview with IN [Rolling] PaperLonnie K. Talbert, President and Chief Operating Officer of Southwest Capital Bank, noted that while federal law currently prohibits financial institutions from doing business with anyone who sells illegal substances (including cannabis), Cole Memorandum– released during the Obama administration in 2013 – instructs federal prosecutors to avoid prosecution in states where marijuana is legal. He also quoted 2014 guide the Investigation Department of the U.S. Treasury Department, the Financial Crimes Enforcement Network (FinCEN), which directs financial institutions to conduct due diligence on cannabis companies and consider whether these companies are involved in one of the priorities of the Cole memorandum or whether they are in violation of state law before do business with them. While he encourages banks to make their own decisions on a case-by-case basis, he does not prohibit them from doing business with marijuana companies.
But whether banks are concerned about legal consequences or not, they may still be reluctant to work with the marijuana industry. “In any industry that is considered high-risk,” Talbert said, “whether it’s a money-handling business, third-party payment systems, cash-intensive businesses, gun companies, strip clubs, medical marijuana, recreational marijuana — anything that counts as an activity. with high risk. … Many banks will not want to touch these businesses, whether they are legal or not, because they have a lot more work to do to comply with regulations. “
This severely limits the space available to cannabis companies, forcing them to look for places to locate businesses in the private sector. Unfortunately, many property owners in the city are as suspicious as banks about working with cannabis companies.
“Cannabis is still stigmatized,” says John Garcia, founder of HAPPYDAZE, a new cannabis microbusiness that will hit the entertainment market this year. “The people who own the buildings are hesitant to let manufacturers grow in them because they are worried about the safety and other tenants in the area.”
Garcia has been unable to find a place for a home that he hopes will become his mass venture, where he grows and sells recreational herbs. “There are quite a few things going on behind the scenes that people don’t know about,” he tells me. “You must have insurance. You need to set up accounting. You need to hire lawyers. You must register your legal entity in the city and obtain the approval of your LLC. All this has been done for us. We’re just waiting for it – a place to work. “
He says some landlords are more open to renting out to cannabis companies now that the city has settled the zoning dispute, but many are still holding back due to personal concerns about the impact of the siting of these businesses. They may have vacant space in accordance with city zoning regulations, but they are not required to rent it out.
Potential cannabis entrepreneurs find time and time again that many homeowners are concerned that the smell of potted plants and the general riskiness of cannabis businesses will alienate neighbors and negatively impact their ability to generate income.
It looks like the growing cannabis companies in Albuquerque will have to come up with creative solutions to get around current barriers and open a store. Some have discussed options such as dividing larger sites among smaller units, although it is unclear if the zoning rules will allow companies to work that close together.
Growers may be forced to move to areas outside the city center or try to grow greenhouse plants. This is bad news for micro-businesses looking to compete with larger, more established companies or those with better financial backing – giants that are likely to have much less trouble acquiring real estate for their business.
This is also bad news for consumers who will have to travel further to buy products whose quality could potentially be compromised without the luxury of a controlled home environment.
Garcia says the answer is educating people about cannabis and changing their perception of the drug. This means that entrepreneurs looking to break into the industry don’t have to work hard. The controversy over cannabis zoning rules will seem simple compared to the hard battle to overcome the stigma surrounding marijuana. After all, no piece of legislation can win the hearts and minds of property owners. This can only happen through a cultural shift.
“We sell cigarettes. We sell alcoholic beverages. We have gambling in New Mexico. Cannabis is just another form of entertainment for some people, ”says Garcia. “And it can also be really helpful. There are many health benefits. “
But the dramatic change must happen quickly. With the deadline for opening doors for entertainment stores approaching, growers will need to start growing their plants no later than September, Garcia estimates.