The recent legalization of marijuana is California, Colorado and Oregon is proving to be a major boost for owners of industrial real estate properties, according to an article in Entrepreneur Magazine.
As more entrepreneurs take advantage of the newly legalized business, they are starting to compete for suitable space to grow, cultivate and package legal cannabis and are driving up values of industrial space in the process.
In fact, leasing property to cannabis businesses recently drove the first marijuana industry-related business to get listed on the New York Stock Exchange, San Diego-based Innovative Industrial Properties (IIPR), is a real estate investment trust that leases large warehouses to medical marijuana growers.
In Oregon, Marijuana grower Chris Abbott told Bloomberg News that it took him 6-months of searching to find a suitable space for his cannabis operation in the Portland area. And because of the tight regulations on the recreational plant, cannabis companies routinely get charged $12 to $18 per square foot, instead of the going rate of $5 per square foot for other business activities.
The state of Colorado also recently legalized pot, and now the cannabis industry is occupying one in 11 buildings in central Denver, according to the Denver Post, and uses 3.7 million square feet of space in the Denver area. The marijuana business “really kicked-started” the recovery of the Denver industrial real estate market, Jessica Ostermick, director of research and analysis at commercial real estate firm CBRE, told the Post.