Can Real Estate Now Be Used for Marijuana Business?

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Although many states have legalized marijuana, the possession, distribution, and cultivation of marijuana remains illegal under the federal Controlled Substances Act.

Because federal law still prohibits the use or sale of marijuana, any individual or business providing services to marijuana-related businesses (MRBs) could be subject to criminal charges for aiding and abetting, or conspiracy.  The receipt or transfer of proceeds from the sale of marijuana, such as rent from an MRB tenant, is a violation of federal anti-money laundering laws.

In addition to the ongoing criminal exposure, certain economic risks remain.  For example, property used for the operation or assistance of MRBs remains subject to forfeiture.  Further, anti-marijuana advocacy groups have initiated civil lawsuits against MRBs and businesses providing services to them, alleging the defendants engaged in a conspiracy to violate the Controlled Substances Act, which also violates the Racketeer Influenced Corrupt Practices Act.