Several things are pushing up cannabis rents, all of which decrease the available supply of cannabis real estate. The vast majority of commercial real estate mortgages contain a clause mandating that the property be used lawfully, but because marijuana remains federally illegal, a property with a cannabis business on it is not operating legally. This illegality entitles banks that hold the mortgage to deem their loan in default and to accelerate the principal so it’s all due immediately and to then foreclose if the borrower cannot find alternative financing to cover its outstanding loan balance.
Did you know most cannabis real estate is paid in full, so it can be owned outright without a mortgage or a bank ever being involved?
The diversity and the complexity of state and local cannabis regulations also helps drive up prices for marijuana business real estate. State laws that limit how close cannabis busineses can be to a school, park, a church, or another cannabis business also limit the number of properties available to cannabis businesses. When you add in local zoning codes that often push cannabis businesses to heavy industrial areas and building codes that often require cannabis production facility to have full fire suspension and air quality systems in place, the list of available properties for the marijuana industry plummets even further.
Growing outdoors could be the best solution.
You can speculate but indoor growing facilities may or may not be in less demand in the future based on the demand for craft cannabis products that typically come from indoor crops.
I have been a resident of Colorado for 36 years. I’m a former owner of a Denver dispensary. The dispensary sold for my retirement.
My book, titled “Colorado Marijuana Real Estate”, is a how to guide for the entrepreneur and the blue-collar guy. This book provides a blueprint for starting a medical marijuana business plan.
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