Facilities & real estate
What happens to a cannabis property if the tenant loses its license?
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The answer
The lease typically becomes unenforceable at the licensed use, rent usually stops, and the landlord must either find a new licensed tenant, convert the building to conventional industrial or retail use, or pursue the defaulting tenant's assets — often through receivership, as with TerrAscend Corp.'s May 2026 Michigan receivership across 20 dispensaries.
Receivership is now a recognized exit path
TerrAscend defaulted on a $210M loan and entered receivership on 6 May 2026, covering 20 retail dispensaries and four cultivation and processing facilities. As of 7 May 2026 the Michigan estate carried $6.8M in accounts payable and lease liabilities against $5.2M of assets, and Lume Cannabis Co. subsequently acquired three former Gage retail locations out of the process.
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Related pages on this site
- Receivership & distressed service
- Michigan distressed market
- How to buy a distressed dispensary
- Why cap rates run higher
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