Harvest Health or rather Trulieve since it bought Harvest Health must be heaving a sigh of relief that it’s High Times on the hook for the rent at Geary St. in San Francisco. Before it was acquired Harvest Health had tried to quickly jump into the San Francisco market by signing numerous agreements. One of them was with Alexis Bronson from the Have A Heart 2 CA LLC as a social equity licensee for a dispensary at a prime shopping spot on the famous Geary Street.
Touted at the time as snagging a spot in the luxury shopping street, neighbor Chanel boutique protested. This was early 2020 and right before the pandemic struck. However, Harvest Health didn’t waste much time on some of the assets including 152 Geary and flipped some of its properties to High Times who was anxious to diversify into dispensaries. Soon thereafter, COVID took hold and San Francisco’s downtown has yet to recover. The problem with retail rental contracts is that many of them can’t be broken with covid blame. Something High Times has learned the hard way.
Cannabis Law Report wrote that on May 31, a judge found that Vijaya Properties (High Times) owes the building owner $4.9 million in back rent. The dispensary was never opened and to add insult to injury, the building is only worth $20 million. The landlord Thor Equities actually wanted $5.9 million, but the judge said that since the landlord basically took the $1 million in a credit facility that was somewhat like a deposit, that money would be subtracted.
The judge noted that a tenant can get out of a lease if another tenant comes along. The landlord could ask the current tenant to leave and replace them and in effect take back possession. But 152 Geary hasn’t done so and so High Times is stuck. Geary St has experienced some scary smash and grab robberies this past year that were so frightening that police were blocking the street from car traffic as closing hours came near. So it’s no surprise that with crime and a depleted downtown along with a moribund retail scene the landlord probably couldn’t find a tenant willing to pay that much.
There was also nothing in the rental contract that gave High Times an “out” in case it never opened the dispensary.
The trial had no jury and was handled remotely. High Times or Vijaya Properties as it’s listed in the case did not dispute the money owed. Side note – Vijaya is a botanica plant with medicinal properties and shares a lineage with cannabis.
High Times Owes $5 Million in Back Rent on Green Market Report.