Tim Cullen didn’t plan on being a commercial property owner, but the pot shop entrepreneur was always willing to be flexible.
Now, he’s hoping to be a landlord.
“Never in my wildest dreams did we intend to own a strip mall in Aurora, it just wasn’t on my radar at all,” Cullen, the CEO of Colorado Harvest Company, said with a chuckle. “But that’s how it worked out.”
Thanks to a few of the many complications Colorado’s recreational marijuana industry faces — including a lack of banking options and often onerous zoning rules — Cullen said buying the building at 11002 E. Yale Ave. was a better option than renting elsewhere in Aurora when the company looked to expand eastward from Denver.
Now, having pumped about $700,000 into improvements at his building near East Yale Avenue and Parker Road — which is already home to one of CHC’s three locations — Cullen is looking for tenants for what he hopes will be a sort of “cannabis business district.”
“There are businesses that, in my mind, play off of what we are doing here,” he said during an interview on a leather chair at the company’s well-adorned Aurora shop.
Right next to CHC sits about 4,300 square feet of wide open and recently upgraded space that Cullen is hoping to rent out and convert into as many as three separate store fronts.
The obvious choice for a tenant is a head shop, and Cullen said he has spoken to a few. But that’s not the only option, he said.
He’s also been in touch with hydroponic stores and a hemp jewelry and clothing company. A take-and-bake pizza shop would be a good fit, too, he said.
The unique thing about the situation, Cullen said, is that unlike most shop owners wo rent and have no control over who moves in, CHC has the chance to choose who their neighbors will be.
“In other buildings, we don’t have that choice,” he said.
CHC was one of the first recreational marijuana shops to open in Denver when that city approved the initial wave of stores in early 2014.
While business boomed in those early days, Cullen said it didn’t necessarily mean he could expand right away. With no banking option, he couldn’t go ask for a loan and take on debt to finance growth.
Instead, they had to take their time and move a bit slower than he may have liked.
Cullen said when he eyeballed expanding to Aurora — his hometown — he initially planned to rent. But at the time, the city was still in the permitting process, so he had to ask landlords to take him contingent on him getting that license. Add to that the fact that many landlords were leery of their own bank objecting to them renting to a pot shop, and Cullen said there were few retail locations that fit what he was looking for.
The spot on Yale did, but it was for sale, so he took the leap.
Mike Elliot, executive director of the Marijuana Industry Group, a sort of trade association for pot companies, said it’s becoming more and more common for pot shops to get out of the rental game and the hurdles that come with it and opt to buy instead.
Beyond the difficulties that can come from getting a lease, Elliot said there are often tense relationships between pot shops and their landlords, and rents often climb steeply.
“It puts the industry in sometimes very difficult positions because of how much investment goes into these businesses,” he said.
Buying gives companies more certainty, he said.
For Cullen, he’s holding out hope that he can attract some marijuana-related businesses to the space, but he hasn’t ditched the flexibility that got him here in the first place.
“I may not get my wish after all is said and done,” he said with a shrug. “At some point I could just cave and a hair salon could go in next door, and I’ll have to be OK with that.”