Facilities & real estate
What is a cannabis sale-leaseback and why do operators do them?
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The answer
A sale-leaseback lets a cannabis operator sell owned real estate to an investor and immediately lease it back, converting illiquid equity into cash for expansion, debt paydown or working capital while keeping full operational control of the building as a long-term tenant rather than an owner.
Range reflects C3's Michigan transaction experience, not a published dataset.
Why cannabis operators use them more than most industries
Federal banking restrictions and Section 280E's tax treatment of cannabis businesses leave operators with limited access to conventional debt and thin after-tax margins. A sale-leaseback monetizes real estate without diluting equity or relying on a bank that may not lend against a cannabis-licensed asset at all, making it a disproportionately common financing tool in this sector.
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