Hello,
Any recommendations on a California title company that will provide title insurance on commercial properties with the intended use as a cannabis facility?
It’s a bit of a challenge here as most companies are refusing to provide title insurance since cannabis is not yet recognized as legal on fed side.
Any suggestions, referrals or recommendations are greatly appreciated. I have clients in need and I’m sure this issue within the real estate community will present itself more often than not!
Thanks!
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Hey Marlee,
I reached out to a few Title Companies in CA and the most credible on was Old Republic Title and I spoke with one of their agents whom stated of all of the title companies in CA being legally bounded by the federal laws, as you’ve stated. He said that in D.C there might be some potential light at the end of their tunnel to possibly pass the bill using a bipartisan approach because they are trying to get traction on state rights acts (if I’m conveying that right), towards the end of this year. At this time though, most title companies are prohibited from participating in the cannabis industry at this time, as you’ve stated being aware of. Hope that helps a little.
Just to be a little more certain, how about we get in some of our CA #business-and-marketing:insurance providers as well as our #classifieds:real-estate members @420_Estates in on this conversation.
Hey @bbennett , @mjiongco , @mjinsurance , @420FriendlyInsurance or anyone else, I think you all should jump in on this conversation.
Great post @MGirley !
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@Kareenabis420
Thank you so much! My first “nope won’t and can’t do it” was by my rep at Old Republic Title here in Stockton. I’ve tried all my escrow and title resources and it’s the same thing. 
I believe this will (more like needs to) gain traction and soon as other insurance facets (casualty and life @cannalifeinsurance) are already following suit irregardless of fed recognition.
The real estate industry is super conservative and at times a little more cautious with new industries as real estate itself is full of complicated and intricate liabilities. My legal counsel presented at a Realtor Association member meeting and most in attendance were either oblivious or ignorant to the fact that cannabis is HERE! No denying, no matter how much the push back. Lol
Anyhow, thanks again! I totally appreciate the feedback and great work on reaching out to the top for answers. I may have to contact CA Dept of Real Estate and see if there are already written drafts on cannabis and real estate laws working together.
Thanks again!
Now, how to advise my client in moving forward is going to be the question. 
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You’re welcome @MGirley ! Yeah everyone has their hands tied right now it seems.
I agree! Lol, at the companies and people still living in oblivion.
My pleasure to engage in conversation and at least attempt to be of some assistance to our active, intelligent and resourceful members in our community. Yeah I think reaching out to the CA Dept of Real Estate is a good idea, or at last a good place to start. Or I guess reaching out to some title companies in DC would be helpful as well as there may be some legislation coming out of DC on this by the end of the year.
You’re welcome, again! 
And yes, after you touch base with some of your suggested resources, then maybe you will have a little more information to provide them in regards to moving forward. Or they might have to wait for a couple more months to receive forward advise.
All the best Marlee!
Kareenabis
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Hi Ladies ~
I have a few recommendations for title company services here in California. Please email me dana@420estates.net and I can help with this conversation!
Dana Wallace
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Hey @420_Estates !
Thanks! @Alex said you would be a great member to jump in on this conversation.
Happy to have you here in our community!
Happy chatting ladies!
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OK… so this makes absolutely no sense, but it is California. I have a call into the department of Insurance. But of course they are directly you to the website for answers, but we all know that the answer is not there.
(Just got off the phone and the Deportment of Insurance thinks that this is a problem. They don’t understand it either.)
Just for your information… Insurance is ALL State regulated, so while Old Republic may not want to do the transaction, it is not because of the Federal issue. However, that might be the internal reason they give, but it is just their internal response. As with Property and Causality insurance industry, I am confident that there are some Title Insurance Companies that will do the transaction, but you have not found them as of yet.
It is probably going to be a smaller, local title company that will write the title insurance on real estate, but truth be told what the building is being used for should have NO barring on writing the coverage. In fact, I don’t believe that use of the real estate is a question that I have ever been asked.
I have some calls out to other associates and I will let you know what I find out. This is not the first time I have heard of this problem so let’s see if we can find a solution.
Stay tuned…
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Thank you for your insight! Appreciate it!
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Ran into same problem in Michigan. Most people are just not disclosing the intended use to title companies im order to close deals.
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This related to a question that I have, and please forgive my ignorance everybody, but is it legally required to disclose the intended use of the property? In changing the land titles, would it be easier to just say that it’s going to be a commercial or industrial property and leave it at that?
I would also be interested how that affects insurances.
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Disclaimer… WE do not sell title insurance…
However that being said, I just got off the phone with the Legal Counsel for one of the largest Agencies in country and he is telling me that the issue is with the escrow agent and not the title company.
The escrow agent is the one that moves the money, so according to him this is the problem, not with the title.
FYI… you are not legally obligated to report the building use, but if the title company knows that it is going to be cannabis related, it does raise red flags. DO NOT DISCLOSE THEM THE USE!
If you find a title company that is NOT also the escrow agent and one that is independently own you should be able to get this done.
How this helps.
Larry
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This group is awesome! I see we have a deep discussion going on about this and I thank you all for your input and help. This is something that the real estate industry will be dealing with more and more as Cannabis gets through it’s final hurdles of legal normalcy. So good for all of us to be on the forefront and in the know.
@420FriendlyInsurance Thank you! I am going to agree and add to your reply. I too just got off the phone with an Escrow Rep who is the info and legal guru for Chicago Title here in Stockton. Considering the situation being a double edged sword, he asked how I was going to advise my client on this. First and foremost as Realtor/Broker I have to remember that Escrow companies complete escrows based on the instruction provided to them by Seller, Buyer, and Realtors involved. However, I do have to keep in mind that disclosure is very important within the real estate industry. So with that said, I have decided to:
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Attach a separate disclosure between Buyer and Seller stating that the property is within a green zone. Nothing more nothing less. This disclosure does not state whether the property is going to be used for cannabis or not. Vague enough for the assumption to go either way and does not affect title or anything the escrow company has to do. Yet, stays within the rules of real estate disclosure and is important because it protects all parties involved from ever saying they “weren’t made aware”. Disclosure of a potential, maybe, “possibly intended” use is preemptive. I mean, who is not to say the new owner may change their mind and grow tomatoes or store cars? I feel this is the best way to properly disclose.
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Advise the client on purchasing the necessary property and casualty insurance for the property’s intended use. That way whether as an owner operator or lessor to an owner operator, my client’s property and everything tied to it and cannabis is protected. I think the rule of intended use is important more so for property and casualty insurance purposes opposed to title.
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Since it is best to keep the property transaction as clean and easy as possible for title and escrow to complete their instructions, I have suggested that a separate contract noting property contingencies and use be drafted and attached, whereas the real estate contract is acknowledged as an exhibit to the contract or addendum per se. That way escrow closes as any normal real estate transaction. Yet, there is a written agreement stating the purpose of the sale and the known contingencies (intended use, etc.) between both Buyer and Seller.
(Whew! I hope I didn’t lose you all.)
Still discussing this with my legal counsel as well and with the VP of title and escrow at Chicago Title, to make sure we are all within legal limits in regards to real estate. But for the most part I am comfortable with moving forward on this transaction as such.
Anyhow, thanks again all!
And @bryan.eden definitely not ignorant at all. Disclosure is a tricky thing within real estate. If one knows of something that has happened to or on the property then disclosure is very legal. For example, if I know that someone raised pigs on a property being sold but do not disclose to my client, then I have just then put myself in a huge pickle. Whereas, if I don’t disclose that someone “could possibly” raise pigs on the property is a different story… Sorry, a bit out there… but all I could think of at the moment. lol And yes, with regards to industrial or commercial you are right. At this point, everyone involved including escrow is aware of that part (industrial and commercial) and this is what I believe we are all agreeing to leave it at or should leave it at. Keeps it simple right? 
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Great advise… the one other thing that might consider is; as a business person I advise everyone to control everything and own nothing…
That being said, I always like to see our clients have their real estate is a standalone entity, separate from the business entity. That being said, use a very generic name for the real estate holding company. Don’t make it your brand name, keep it generic and that will stop some of the questions.
If you need assistance with the Property and Casualty insurance for any and all of your real estate needs, 420 Friendly Insurance is here to assist. We are happy to write a lessor risk policy for all landlords.
Hope you find this information useful.
Larry
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Hi Everyone -
I have been transacting with independent escrow companies and regular title companies, putting the Cannabis portion of the transaction separate from the real property transaction. The Cannabis portion gets handled by cannabis attorneys.
However, I am excited to report that I just learned about an independent escrow company that will serve the Cannabis Industry and all portions of the transaction. They can handle cannabis real property transactions, cannabis business transactions, partnership buy out escrows, personal property transactions etc…
They will work with you to structure each unique deal and all the complexities that come along with working in our newly regulated industry.
Shannon Wright is the escrow officer and manager with Casa Bella Escrow Services. She is extremely knowledgeable and excited to work with Cannabis transactions. Her office line is (951) 479-0341 ext 225 and her email is shannon@casabellaescrow.com.
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Wha??? Oooh Dana, you are the bomb! lol Thank you!
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Whenever I purchase land, improved or otherwise, cash deal or financed, I always leave the intended use of the land as personal or industrial. I have managed to avoid potential issues that way. I have discovered that underwriters would prefer to not know sometimes. I always secure title insurance on cash deals or owner-carry transactions, regardless of the state in question.
How have others circumvented the title insurance issue in land transactions? Who else has dealt with this?
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