By Daniel Markofsky
Let’s say a landlord has a commercial warehouse building divided into four spaces and leases each to a different marijuana grower. One Tenant does not pay rent because Tenant feels Landlord is not performing its responsibilities. In response landlord changes the locks, locking tenant out. Enough days go with the plants locked inside unattended so they are assumed dead. Tenant now really does not want to pay rent, but would like to recover its equipment, such as the expensive grow lighting, and damages from Landlord.
What’s the tenant to do?
This scenario really took place, not too many years ago, in a rural part of Colorado. This commercial landlord must have been the only one in the State of Colorado unaware of the need to use legal process to recover possession from a tenant of leased real property. (Tip to Landlords: consult legal counsel before attempting self-help repossession.)
Tenant finally consulted its legal counsel. Legal counsel for the Tenant concluded that the marijuana at issue, classified as medicinal, had likely lost its medicinal status when a third party – the Landlord – took possession. As a result, even if the Tenant could prevail in a lawsuit against the Landlord, it could not regain possession of the plants.
Landlord was not a licensed marijuana grower and lacked lawful authority to possess the plants.
Further, with possession having transferred to the Landlord and losing its medicinal status, the Tenant could not simply repossess the marijuana.
The Marijuana Enforcement Division (“MED”) of the Colorado Department of Revenue was consulted. MED agreed that the marijuana was no longer legal under Colorado law.
Tenant filed suit against the Landlord under the Forcible Entry and Detainer (“FED”) laws. Tenant sought temporary possession sufficient for it to get in and remove its valuable personal property. Landlord’s counsel failed to appear at the FED hearing and the Court granted the relief sought.
Several days later the local Sheriff, MED personnel in hazardous materials suits, and the Tenant representative converged at the property. Access was forcibly obtained at direction of the Sheriff and MED haz-mat crews – concerned with both legality and moldiness of the abandoned plants – confiscated the plants and designated them for destruction. Tenant then went in and removed the personal property it desired.
As complicated as this story sounds here, its presented with the clarity of hindsight. At the time each step of the process broke new ground. Creativity and collaboration were required at each step and the outcomes completely unknown. Marijuana counsel employed a multi-disciplinary approach to solve the problems.
For more information on this topic or any other marijuana law questions, contact our Colorado business law attorneys at Cantafio Feldmann Nagel at 1-(888) 458-0991.