Some cannabis retailers even agree to share profits with their landlords. "I don't know anybody who's paying less than $6,500 a month rent, and that is for a small shop in a tough neighborhood," he said.
A recent bidding war for a decent 1,600-square-foot storefront on the Westside of Los Angeles ended at $35,000 per month, he said, or about $87 per square foot. That's more than the average $75-a-square-foot rent for small luxury boutiques on Rodeo Drive in Beverly Hills.
"It's really getting to be a huge pain for us" to find retail locations with unrestricted zoning and pot-friendly landlords, he said. "I remember when this business used to be fun."
But for Smith, the legalization and lack of "fun" mean there has been a shakeout that is leaving behind a lot of operators who came up when the cannabis business operated in a gray area.
Her prospective tenants must be professional and "understand that you need a real person to sign a lease, you can't steal power, you need to act like a real business. Not everyone has the executive skills to step forward into the light."