The love/hate relationship that seems to be forming between the Commercial Real Estate industry and Marijuana may or may not be on your radar, but it is reality.
Fully legal in nine states, one inhabited territory, three native-American reservations, not to mention Washington D.C., it’s impact has been felt across multiple industries. Some cheer, others protest, but regardless, we in the commercial real estate industry need to be educated on the basic legalities as it has become commonplace for medical use and in some areas, recreationally acceptable as well. The federal law mandates that it be grown and manufactured in the state in which it is sold/consumed.
The demand and, in turn, the value for warehouse and industrial properties has significantly increased in affected regions. Climate controlled warehouses and distressed properties including former storage, data, and manufacturing are all being acquistioned and repurposed. Even the limping retail sector has been affected as in those states where retail sales have been sanctioned, as marijuana retail shops have breathed life into some of those long-time vacancies.
Here’s a run down of the basics for our region:
Pennsylvania: Medical Marijuana approved by Governor Wolf in April of 2016
Maryland: Decriminalized and Medical Use/Manufacturing/Distribution approved
Delaware: Decriminalized and Medical Use/Manufacturing/Distribution approved
New Jersey: Governor Jon Corzine signed Medical Marijuana law in January of 2010
There are concerns that this may be another real estate bubble that eventually pops. Even though concerns remain, this industry has sparked new property interest and investment pursuits that we in the industry cannot deny. Both Brokers and Property Owners alike seem to be riding the wave while they can. Time will tell as always.