The Cannabis industry is rapidly growing and there is significant interest from both the private and public sectors to move things forward. For the former, it’s a business opportunity to take advantage of growing demand for cannabis-based products. For the latter, the potential tax revenue that can be collected by those private enterprises is attractive.
Since there is no federal law providing blanket legal standards, we are left with individual state laws and regulations on how cannabis can be grown, sold, etc. Some states are further along than others in working through the proverbial ‘red tape.’ Others, like Pennsylvania, are one of those states that are still figuring things out.
Title insurance has certainly been caught in the fray.
“As a Schedule I drug under the Controlled Substances Act, it is a federal crime to possess, use, sell, or distribute marijuana. Therefore, handling funds or settling financial transactions for cannabis-related businesses could be considered assisting in unlawful activity. This also presents numerous risks of insuring and transferring real property that is associated with unlawful activity, including, for example, the potential to implicate anti-money laundering rules as well as forfeiture laws.“
For these reasons, title insurance has been difficult if not impossible to get in states like Pennsylvania, which means that buyers would need to perform their own due diligence on a property and assemble a specialized team of consultants and legal experts to navigate the transaction.
In Pennsylvania, a major change has now made it easier and Principle Abstract has taken a position of leadership when it comes to cannabis related real estate transactions.
Getting Title Insurance for Cannabis Related Businesses in PA is Possible
Until recently, buyers have typically not been able to obtain owner’s policies as most title companies have not been willing to provide coverage options. Principle Abstract has developed relationships with several organizations that now make this possible.
Furthermore, lenders were typically unable to obtain loan policies. However, our office has now been able to successfully offer and close transactions for cannabis companies.
We’ve also been able to develop a solution that allows us to act as escrow agents in a cannabis related real estate transactions in Pennsylvania.
By combining these unique solutions, Principle Abstract is uniquely positioned to assist in most if not all cannabis related transactions throughout the state of Pennsylvania and are now offering consultations to anyone seeking title and escrow support on a transaction.
Additionally, we are members of The Pennsylvania Cannabis Coalition (PCC), a 501(c)6 trade organization comprised of Pennsylvania medical marijuana permit holders. Through our membership with PCC, we can help to advance the progress of the cannabis industry within the state of PA.
More on the Coalition:
“Our purpose is to protect and preserve Pennsylvania’s emerging marijuana market. We help devise policy that regulates the sensible cultivation, distribution, and use of cannabis. We represent the current medical cannabis industry here in Pennsylvania. We advocate for a robust yet economically sensible regulatory framework. We continue to educate elected officials, regulators, and the general public about of the need and benefits of cannabis-derived therapies. Our team includes both industry and public affairs specialists with rich, domain-specific experience at the local, state, and federal level.“
Are you currently involved in a commercial real estate transaction for an entity operating within the cannabis industry? Give Principle Abstract a call today and a member of our team will be happy to offer a consultation.