In the latest installment of Financing Your Cannabis Future podcast, hosts Rachel Wright of Virgin Strategies and Beard Bros Media welcomed two prominent figures in the cannabis real estate and licensing sector to share insights on navigating the evolving industry landscape.
The episode featured Jason Piazza, CEO and Broker of Record at WeCan, and Meilad Rafiei of WeCan, who discussed their extensive experience in cannabis licensing, real estate transactions, and industry expansion across the United States. With a background spanning over two decades in commercial real estate, Piazza detailed how his company initially focused on California’s licensing and entitlement work before expanding nationwide, including markets such as New York, New Jersey, Ohio, and Nevada.
A Track Record of Success
“We’ve submitted nearly 230 licensing applications with an 85% success rate,” Piazza explained. “Our team has brokered approximately $250 million in cannabis-related real estate deals, including leases, purchases, and business transactions involving pre-operational and operational licenses.” His partner, Meilad Rafiei, added that their team’s research capabilities and industry knowledge enable them to source real estate, assist with license transfers, and advise clients on valuation and transaction structuring.
Industry Challenges and Opportunities
The conversation highlighted the complex regulatory environment at municipal and state levels. Both experts emphasized the importance of understanding local ordinances, transferability of licenses, and the nuances of lease versus ownership decisions. Piazza pointed out that many cities impose restrictions on license transfers, which can significantly impact deal structures and exit strategies.
“Knowing which municipalities are friendly to cannabis businesses is crucial,” Rafiei noted. “The staff’s willingness and ability to implement policies properly often determine a business’s success.” They also discussed the variability in licensing transferability and the importance of legal structuring, such as asset purchases or membership interest agreements, to facilitate deals.
Financial Fundamentals and Market Dynamics
The episode delved into key financial metrics vital for buyers and sellers, including gross sales, net operating income (NOI), EBITDA, and valuation multipliers. Piazza stressed that in retail cannabis operations, understanding margins and applying appropriate multipliers (typically around three times NOI) are essential for accurate valuation.
Furthermore, they addressed real estate considerations, including the pros and cons of leasing versus owning property, and how market conditions—interest rates, landlord negotiations, and rent premiums—affect transaction outcomes. Both acknowledged that industry profit margins are often slim, making strategic negotiations vital for sustainability and future exit potential.
Reflections on the Green Rush
Drawing comparisons between the West Coast and East Coast markets, the hosts observed that California experienced a prolonged ‘green rush,’ with many entrepreneurs initially benefiting from high margins and demand. However, increased regulation, market saturation, and price compression have tempered expectations.
In contrast, the Northeast markets, such as New York and New Jersey, are characterized by a more measured, data-driven approach. Rafi noted that seasoned investors and long-established families contribute to a more cautious and informed market environment.
Rachel Wright expressed appreciation for her guests’ insights, emphasizing the importance of industry knowledge, regulatory awareness, and strategic planning in a rapidly evolving sector. Both Piazza and Rafiei reiterated their commitment to supporting clients through informed decision-making and expert transaction management.
As the cannabis industry continues its maturation, leaders like Piazza and Rafiei underscore the significance of experience, adaptability, and meticulous research in capitalizing on emerging opportunities.
