Business
Tips for cannabis business owners facing sky-high real estate costs
The “green tax” levied on many marijuana companies often sprouts like a weed in the real estate business.
That’s because some landlords charge a premium when leasing to marijuana businesses, according to cannabis industry officials.
Landlords, these officials note, often are under the impression that everyone in the marijuana industry is getting rich – and has money to burn.
“Landlords see cannabis executives coming from a mile away,” quipped Kevin Bush, chief financial officer for Denver-based Sweet Leaf Madison Capital, which provides funding to marijuana companies.
But getting rich in the cannabis industry is far from a sure bet – especially these days.
In mature markets such as Colorado, for example, real estate prices have skyrocketed in the past few years. Wholesale cannabis prices, meanwhile, have gone in the opposite direction.
That one-two punch is making it harder for marijuana companies to pay rent – much less purchase property.
“It has been well-documented that cannabis companies are struggling to pay their bills, including leases,” said Jason Vegotsky, CEO of Petalfast, a sales and marketing agency for the cannabis industry based in Irvine, California.
Tim Cullen, CEO and co-founder of Denver-based Colorado Harvest Co., leases all of his properties and has felt that crunch.
Moreover, landlords seem more than happy to to let marijuana business foot those tax hikes, as was the case for Cullen.
“Everyone’s taxes just went up because the value of their properties went up 30%,” Cullen noted.
“Our rents went up significantly because the landlords pass on the cost to us.”
But the situation isn’t hopeless.
Cannabis business owners looking to navigate soaring real estate costs amid tough market conditions have options at their disposal, including negotiating with landlords and linking business profitability to lease payments.
Tips to deal with landlords
As a possible recession looms in the United States, landlords overcharging cannabis companies for rent might be open to negotiations, said George Mancheril, CEO of Bespoke Financial, a Los Angeles commercial lender that works with cannabis companies.
“Do we play nice, or are you going to be looking for a new tenant in the middle of a recession?” Mancheril asked.
He added that landlords see marijuana businesses as both more lucrative and higher risk, which is why they tend to charge more. But larger macroeconomic factors also play a role.
“When it comes to a recession, more or less everything is up for renegotiation to some degree,” Mancheril said.
Those property owners need to understand that while cannabis is a “very idiosyncratic risk, in general, those premiums on the lease rates have to reset to the actual profitability of these businesses,” he said.
Marijuana businesses – especially those in mature markets such as Colorado, Oregon and Washington state – are not seeing margins as favorable as they once were.
To weather rising costs, Gary Cohen, CEO of Cova Software – a Denver provider of cannabis point-of-sale and tracking software – advises working out a deal with the landlord where the cost of rent is tied to business receipts, sales and profitability.
“Look at another way to skin the cat, because it’s not happening,” he said.
Another approach is negotiating with the property owner to make sure you’re paying the market rate, said Troy Datcher, CEO of The Parent Co., a vertically integrated cannabis company based in California.
By “market rate,” Datcher means the amount comparable mainstream businesses are paying to rent similar properties.
“For existing leases that are over market, I recommend you meet with your landlord and share your business challenges and be as transparent as possible and negotiate a lower rent,” he said.
“It is in everyone’s best interest to make sure your business is viable and you continue to pay at least market rent.”
For a new lease, Datcher recommends locking in a shorter team lease with two or three renewal options. For example, a three-year lease with an option for three, one-year renewals.
Business owners should also negotiate a reasonable termination clause should they need to exit early, he said.
A termination clause favorable to the tenant would be a fair penalty for breaking the contract, for example.
Silver linings
One silver lining: The COVID-19 pandemic lockdowns and subsequent shift to work-from-home or hybrid models mean more commercial spaces are going unused.
As a result, some cannabis companies may be able to find savings, said Blake Schroeder, CEO of Medical Marijuana Inc., a San Diego-based holding company with subsidiaries that make and sell a range of hemp-based products.
Beyond finding cheaper commercial buildings, negotiating with landlords and tying rent payments to business performance, some companies are downsizing and putting more responsibility on their partners, said Vegotsky.
For example: If a business has partners with deep pockets or other ongoing interests, the cannabis company could rely on that partner to weather an economic downturn or unfavorable market conditions – such as the booming real estate market.
“This strategy should lessen the burden compared to taking full responsibility in any one, single business,” Vegotsky added.
“Companies that are lean and focused will have a higher rate of success in a stressful economic environment.”
That’s smart business strategy, said Skip Motsenbocker, CEO of Pacific Stone, a cannabis cultivator based in Carpinteria, California.
He added that cannabis companies with leases should have their prices and cost of production adjusted accordingly so that real estate costs aren’t as much of a financial hit as a line item.
For example, a cannabis cultivation company ought to make sure it is growing marijuana as efficiently as possible to protect itself from rising real estate costs.
Moreover, growers in markets with favorable wholesale prices might try to raise prices as lease rates rise.
For companies that own their own properties, Motsenbocker added, rising real estate prices could provide potential benefits with the ability to leverage assets that have increasing values.
A property that has increased in value can be refinanced for more operating capital, for example, or used as collateral for another loan to expand the business.
“In either case, however, the line item has to be controlled,” he said.
“This stems from a solid business practice that maintains top line so the relative percentage cost doesn’t fluctuate out of the norms.”
Source: https://mjbizdaily.com/tips-for-cannabis-business-owners-facing-sky-high-real-estate-costs/
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
AI & Technology
Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations
Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).
The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.
Trial Push Despite Multi-Million Euro Settlement
The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.
Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.
A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.
Allegations of VAT Evasion Through Marketplace Sellers
At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.
Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.
Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.
Italian Government Named as Affected Party
In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.
Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.
Multiple Investigations Add to Pressure
The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.
Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.
In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.
Amazon Denies Allegations
Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.
Broader Impact on Europe’s Digital Economy
If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.
With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.
Aviation
IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?
Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.
Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.
Root Cause: IndiGo’s Market Monopoly
The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.
This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.
Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.
Government Intervention and Regulatory Weakness
The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.
Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.
The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.
If Telecom Giants Fail: A National Paralysis
The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?
If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.
In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.
E-commerce Monopoly: Another Fragile Ecosystem
The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.
Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.
A Wake-Up Call for Regulators
The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.
As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.
Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.
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