Multistate cannabis operating company MedMen Enterprises argues in its response to a lawsuit it shouldn’t be required. By law, to pay more than 1 million dollars, it is alleged to owe in back rent. Since marijuana is prohibited according to federal law. Real estate company Thor Equities Group charges in an action before New York federal court. That the Los Angeles-based MedMen had defaulted on rent payments that were agreed to in a lease in 2019. Law360 reported.
New York-based Thor Equities said in the July lawsuit that MedMen did not pay rent for the Chicago property in the month of August 2021. The real estate company alleges MedMen has a debt of greater than $9550,000. MedMen as a response to the inquiry, admitted that it was a tenant and had stopped paying rent. The lease, however, isn’t protected under the federal laws, MedMen claimed, since marijuana is illegal in the federal government.
MedMen has stated in its motion that “as Plaintiff well knows. However, it is not entitled to judicial enforcement of the Lease and the Guaranties or the damages it seeks. Because the distribution, sale of marijuana and lease of real estate for such purposes is still illegal under Federal law.” Certain people in the cannabis industry are concerned that MedMen’s argument can discourage landlords, and makes it harder for cannabis businesses to lease real property.
Kristin Jordan, the founder and chief executive officer of the cannabis real estate broker Park Jordan, told The (Syracuse) Post-Independent that the argument is “absurd.”
“My fear is that the longer this drags on,” she added, “the more attention that it gets, the more fear and concern that will ripple through the industry.”