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Commercial real estate: Denied pot sellers stuck with leases?

Prospective cannabis retailers may have jumped the gun a bit early. Those in Canada who are hoping to be accepted to sell legal marijuana but who won't be given the green light may be stuck with commercial real estate contracts that they may have a tough time getting out of. These individuals may have already signed leases that are pretty much ironclad, according to a Calgary-based real estate advisory company.

Commercial properties already leased by those who don't make the cut in terms of being able to peddle pot, will be hard to unload and could cause a lot of financial angst for those who didn't think about what would happen if they weren't approved to sell cannabis in a retail environment. Some of these would-be sellers have signed leases without clauses for being able to break the lease. This means they may be stuck with exorbitant rents without the income.

The city of Calgary has received 269 applications from those wanting to open up cannabis stores. Reportedly, 113 of those have already been rejected, and 94 of those are in the appeals process. Many of the rejections came because of their intended locations.

A lawyer experienced in commercial real estate may have been able to advise these types of individuals on the potential pitfalls of signing a lease without opt-out clauses. Getting the advice of a lawyer prior to signing any contractual agreement in Canada may save a lot of financial stress in the long run. It may be better to obtain prudent legal advice than be on the hook for thousands of dollars in lease fees. 

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