NEW YORK (MainStreet) MJ Holdings (MJNE) is aggressively seeking to acquire real estate in Washington state for the purpose of leasing to regulated marijuana-related businesses. The Florida-based penny stock company plans to ante up $100 million towards warehouses for growing and small retail properties to serve as dispensaries.
"There is a demonstrated urgency in Washington for capital support for the real estate component of this industry and a call for mature seasoned financial investors to provide leadership experience and help marijuana businesses establish themselves," said Shawn Chemtov, co-chairman of MJ Holdings.
Read More Are Marijuana Stocks Shady?
But since the state of Washington has limited to 2 million square feet the total amount of land allotted to grow cannabis, MJ Holdings is in a hurry.
"There is urgency to control the grow space," said Adam Laufer, co-CEO of MJ Holdings in Miami. "You need space available to grow and those with a first mover advantage will benefit in the long run."
Some 700,000 square feet is already taken and currently in operation and cannabis real estate investments in Washington are restricted to free standing buildings because bank mortgages in general do not allow marijuana tenants since marijuana is still illegal under federal law.
"It is likely that that the landlord's loan will be called by the bank if and when it is discovered that they have a marijuana tenant on the rent roll," said Laufer.
This limitation, however, is viewed as an opportunity by MJ Holdings.
"If MJ Holdings owns the building, tenants no longer need worry about a traditional landlord," Laufer told MainStreet. "As a landlord with its own financing, we allow the operator to focus on their business without worrying about a succession plan or contingencies should they get evicted."