OCTOBER ISSUE: Green Rush
- Oct 06, 2014
Legal Cannabis Presents High Risk-Return Scenario for CRE Trailblazers
Mike Ratliff, Senior Associate Editor
In 1996, California became the first state to legalize medical marijuana. Today, cannabis is legal for medicinal use in 23 states and Washington, D.C., and is legal for retail sale in Colorado and Washington. Seventy-five percent of the U.S. believes that the sale and use of marijuana will eventually be legal nationwide, according to a recent Pew Research Center study.
The first retailers in Washington received licenses to sell cannabis products on July 8. While it is early to draw conclusions on the impact of legalization on real estate, a wave of development tailored for legal pot is not out of the question. This July, marijuana-related private equity firm Privateer Holdings announced that subsidiary Arbormain would develop a 200,000-square-foot spec facility in Lacey, Wash., for growing, processing and shipping cannabis products.
The earlier legalization of recreational pot in Colorado triggered a fever of warehouse activity. Early last fall, months before the Jan. 1 legalization date, prices of suitably zoned warehouses—typically 10,000 to 20,000 square feet in size at the time—began to increase.