“Don’t Stop the Cannabis Real Estate Behemoth”

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TORONTO – Cannabis tenants are revitalizing troubled properties and bringing in additional businesses, according to a new report by an international property and investment management company. Colliers… However, pharmacies and retail stores pay 25-50 percent more than their main neighbors for similar commercial space.

Demand for commercial cannabis leases has skyrocketed since 2016, when there were 261 dispensaries in California. Today that number exceeds 500. In Colorado, the number of dispensaries exceeds the number of McDonald’s and Starbucks combined. However, nine out of ten homeowners and property managers in California refuse to deal with cannabis-related businesses due to regulatory, insurance or banking problems or because they hide personal biases. Consequently, renting industrial space is about twice the normal rate: $ 1.50 to $ 1.75 per square foot per month, compared to $ 0.78. Retail space rates can be even higher.

Difficulties in obtaining a lease are pushing some companies to buy propertyalthough finding locations that meet zoning requirements can be difficult. Sellers get high prices when shoppers are known to be cannabis-related: One 6,150-square-foot retailer in Sacramento, California recently sold for $ 585 per square foot.

“Even with these obstacles, it is impossible to stop the flow of capital into this monstrosity,” the report told commercial brokers. “Regardless of your attitude towards cannabis, cannabis businesses are growing rapidly and could very well be your next new client looking for commercial space.”



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