California Cannabis Property Due Diligence
A California cannabis property purchase can involve four different records for the same address: the deed, local land-use approval, local operating authorization and state license. Start by matching the assessor’s parcel number (APN), premises address and legal entity across the records. One discrepancy can change the buyer’s ability to use the property after closing.
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Before you make an offer
| Request | Match it against |
|—|—|
| APN, legal description, preliminary title report and survey | The listed acreage, recorded easements, road and utility access, and the location of buildings or approved canopy. |
| Local permit, approved plans, conditions and final inspections | The current site, the exact use, any outstanding conditions, enforcement history and whether the city or county will allow the buyer’s proposed use. |
| State license number, entity name and premises diagram | The public license record, physical premises, license activity, expiration and the ownership-change procedure. |
| Equipment schedule and leases | The purchase agreement, any leased equipment or landlord-owned fixtures, outstanding liens and landlord consent requirements. |
Ask the planning or cannabis office a question it can answer specifically. “Can the buyer pursue indoor cultivation in Building B at this APN, and what local authorization or change-of-use approval would apply?” is more useful than “Is this cannabis zoned?” Request the document number and written response when an answer affects the purchase.
Investigate the physical property during escrow
Farms and greenhouses
Walk the access route and cultivation area with the approved plans. Look for unpermitted grading or structures, undocumented crossings and discrepancies in the footprint. Ask for water source records, well yield, applicable diversion rights, authorized storage, monitoring records and the applicable notice of coverage or exemption. Confirm whether agency obligations continue after closing. Bring in qualified specialists for water supply, biological resources, engineering and environmental condition where appropriate.
Warehouses and manufacturing facilities
Ask the utility what service is actually available to your operation, with a cost and schedule for any upgrade. A panel rating describes the equipment you can see. Utility capacity, transformer requirements and the right to use service for the proposed load require separate verification. Walk HVAC, electrical, drainage, sprinklers and fire-rated areas with qualified contractors. Request equipment ownership, service history and a list of systems the seller plans to remove.
Storefronts and leased premises
Check public access, parking, visibility, permitted use, security and accessibility. If the operator leases the premises, obtain the signed lease and amendments, rent history, option deadlines and assignment language. Ask who owns the improvements and who must repair, restore or remove them on exit. Review the tenant’s compliance obligations and what happens if operations stop.
Closing conditions and deal structure
Ask counsel to document the dependencies that matter. Examples include landlord consent, approval of the applicable ownership change, verified access rights, confirmation that specified equipment is included, acceptable insurance and a lender’s written acceptance of the use. Record who must provide evidence, the applicable deadline and what happens if a condition is unmet.
If the transaction includes a business, ask for financial records, inventory and asset schedules, liens, tax records and compliance history appropriate to the deal. Price the real estate, equipment and operating business separately. For a tenant-occupied purchase, model vacant carrying costs and alternative use. An environmental professional can advise whether a Phase I assessment or further investigation fits the property history.
What state records can tell you
The state’s unified search helps identify the license holder, type and status. Local permits and approvals need their own review. When all ownership interests transfer, DCC’s rules require a new approved license application and payment of required fees before the business operates under the new ownership. Review the applicable provisions with counsel when an existing owner will remain or when premises will change.
DCC license lookup · DCC regulations · DCC CEQA guidance · State Water Board cannabis water quality · California Fish and Wildlife cultivation permitting
Sonoma County cannabis properties · Lake County cannabis farms · Financing California cannabis real estate
