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Beware Marijuana Business Scammers

The medical marijuana industry is growing rapidly. As a result, the number of scammers has increased along with the growth. These scammers include people who promise to find locations to open a dispensary or a building to cultivate marijuana at an exorbitant cost to you with no written guarantee associated with oral promises. They typically promise that you will be legal in whatever building they find for you, and will also negotiate the lease for you.

However, the typical scammer won't tell you that, to be completely legal, the city or county in which you seek to conduct your activity must affirmatively permit your activity, be it dispensing or cultivating. So, they will find you a building, and, while the entity you use (association, corporation, etc.) may be legal under State law, the unfortunate hitch is that you will be illegal under the local ordinance which bans the activity in which you are engaged. This will make you vulnerable to enforcement of the local zoning code which in turn creates risk of lawsuits, (either against you or the landlord, or both) substantial daily fines for each day of violation, or at worst, a raid by the local police or sheriff who will confiscate all your plants, marijuana, laptops, computers, phones, business equipment and any cash they can find and may arrest anyone on the premises and charge them with criminal violations.

Also, the scammer may negotiate the lease but not tell the landlord the nature of the use to which the building will be put, e.g. marijuana dispensary or cultivation site. This in turn places you in jeopardy of being evicted by the landlord should the landlord discover the real use of the building and, if you signed a multiyear lease, you will be liable for the full balance of the rent for the remaining term of the lease.

The moral of this story is BUYER BEWARE. Get everything promised in writing and have a lawyer who practices in the marijuana law area review whatever contracts you are going to sign before you sign them so you don't end up with buyer's remorse.