While some jurisdictions allow provisional applications that let an applicant apply preliminarily without a location or simply identify a location, eventually every applicant needs to evidence control of the proposed site, either in the form of fee ownership, a lease, an option to purchase or lease, or a letter of intent to purchase or lease.
For many applicants, particularly in urban areas and core markets, the up-front cost to acquire a property without the certainty of having an license in place is simply too risky and/or cost prohibitive.
A properly structured lease can provide an applicant with the certainty that they will have the absolute right to operate their intended use on the site for a minimum term of years at a fixed or known cost, and may include the upfront or pre-negotiated right to perform specific improvements.
They are typically shorter in length than the subsequent document that will be executed upon the exercise of the option .
While a valid and legally binding option to purchase may allow a purchaser to pursue specific performance in the event of a seller default, such a remedy becomes a lot more uncertain to the holder of an option to lease or letter of intent where material terms have not been agreed to and damages become speculative.
At the end of the day, the best position an applicant can be in at the time of submitting an application is to have a binding document in place for site control of the property that contains as many material terms as possible, is contingent upon successfully obtaining the applicable cannabis license , and is in a form that is generally recognized by courts, common law and contract law in the jurisdiction in which the property is located.
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