By Ryan George
Cannabis is fiercely evolving from an illegal, counter-cultural pastime into one of the largest emerging industries in many states.
The normalization of cannabis laws is becoming realistic across the United States, spawning a colossal multi-billion dollar industry, and engaging a mass of venture capitalists, entrepreneurs, and individual investors.
Cannabis businesses are among a group investments with great room for multi-year growth. And since being legalized in many states, Cannabis has become the fastest growing industry in the United States, according to ArcView Group’s latest research:
Due to this rapid growth, the real estate industry has to take note of the high demands for cannabis products and the facilities required to produce them. According to ArcView CEO, Troy Dayton, investors nationwide have placed their attention on the cannabis industry as it is expecting to experience explosive growth. “It isn’t necessary for a rocket scientist to see that the marijuana industry is going to provide a lot of economic benefits,” said Dayton. He went further to add “one of the highest business sectors to observe has been the real estate sector.”
Real estate brokers have harnessed this opportunity; Cannabis growers are absorbing land properties and industrial spaces to cultivate cannabis legally. Studies have shown that the cannabis industry single-handedly hiked up industrial property prices in many regions to an unusual level. With nationwide cannabis reforms likely to take place this November, new players in both the manufacturing and cultivation sectors will need to re-strategize on how they will supply the escalating demand — real estate will have a significant role in all this.
At this time, the supply of cannabis friendly or compliant properties can’t meet the demand of the cannabis industry and prices have soared. The cannabis industry is driving the real estate recovery in parts of Denver, with an estimated 1 in 11 previously vacant industrial buildings now housing cannabis-related businesses.
Real estate developers and investors are entering this promising market in different forms. Some entrepreneurs plan on entering and exiting the market without having any form of association with cannabis entities are speculating on real estate in areas that are likely to experience reforms. And those with an increased appetite for risk are leasing facilities to cannabis tenants and seeing high returns.
As the cannabis industry continues to experience growth, the demand for facilities, financing, and ancillary professional services are likely to follow.
