Marijuana Businesses Raise Millions of Dollars by Cashing Out of Real Estate through Sale-Leaseback Deals
Large cannabis companies increasingly are selling their own cultivation, processing and storage facilities and immediately leasing them back as a way to instantly raise tens of millions of dollars at a time when outside financing is scarce.
Unlocking the value of real estate with a sale provides money that can be used to grow a marijuana firm’s core business, without diluting the value of its stock, the way issuing more shares would.
In real estate parlance, these deals are known as sale-leaseback transactions, since the property is sold and leased back.
In other words, the marijuana company becomes a tenant and the real estate investor becomes a landlord.
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