As more states legalized marijuana, more businesses opened to sell it for medicinal or recreational uses, or both.\u00a0This has impacted commercial real estate demand, with a potential for continued growth across the nation as more states consider formally legalizing cannabis.<\/p>\n
Commercial Real Estate Demand Gets High<\/h2>\n
Considering that legal recreational cannabis alone is now a $15 billion dollar industry<\/strong>, a figure that\u2019s expected to surpass $25 billion<\/strong> in just three years, the combined medical and recreational marijuana businesses are actively impacting commercial real estate demand in 2022.\u00a0<\/p>\n Owners of a variety of commercial real estate holdings, from stand-alone shops to strip malls, are seeing retail rental and purchase demand expand to a degree that many never expected. Warehouse facilities are seeing an even higher increase in demand.<\/p>\n The following sections introduce managers and owners of commercial real estate to the needs of cannabis-based businesses, together with the states where these businesses are legal and actively seeking retail and\/or warehouse space.\u00a0\u00a0<\/p>\n While the term \u201cmarijuana dispensary\u201d was initially used to describe retail sales fronts, it has been largely replaced with \u201ccannabis dispensary.\u201d\u00a0<\/p>\n This is now considered the politically correct term and is a popular internet search phrase for these businesses.<\/p>\n Because the cannabis industry is heavily regulated, licensing is complex.\u00a0<\/p>\n These not only vary from state to state, but they can also change depending on the cannabis retailer\u2019s business category and which city or county they\u2019re planning to open their business.<\/p>\n With this in mind, it\u2019s important to check city and county zoning laws before any commercial real estate is offered for sale or rent to a cannabis-based business. <\/p>\n When viewing potential locations and building styles, managers of cannabis dispensaries usually envision retail space suitable for a layout similar to a traditional pharmacy or provider of medically-related services, such as non-surgical cosmetic procedures or IV vitamin therapy.<\/p>\n Retailers of recreational marijuana often mimic the interior design used by their dispensary colleagues.\u00a0<\/p>\n This is because recreational and medicinal cannabis products are often displayed in similar containers.\u00a0<\/p>\n Some recreational cannabis retailers describe themselves as \u201crecreational marijuana dispensaries.\u201d<\/p>\n Managers and brokers involved with rented real estate may be asked to assist with the build-out and to recommend contractors who are willing to take on this type of project.\u00a0<\/p>\n (Even though the majority of the American public supports the legalization of cannabis, some are still opposed to its use, including commercial contractors.)<\/p>\n Not all new dispensaries will require a total build-out. A few have gone rogue, moving into commercial buildings that were formerly home to a different business and \u201cre-purposing\u201d them with minimal fittings and fixtures.<\/p>\n One infamous example: Los Angeles cannabis retailer Kind for Cures takeover of a former Kentucky Fried Chicken building.\u00a0<\/p>\n While its owners won marketing awards from local publication LA Weekly<\/em>, the owners of KFC cited trademark infringement until Kind for Cures repainted the building\u2019s KFC-red mansard roof to green (what else?).<\/p>\n While most Americans support the legalization of medical cannabis, not all of them want their business to be near a cannabis-based business.\u00a0<\/p>\n According to data from the National Association of Realtors (NAR), members who are employed or who invest in the commercial real estate sector have noticed the following trends:\u00a0<\/p>\n As mentioned previously, those involved in the rental or sale of commercial real estate will want to consult existing tenants before showing retail or warehouse space to a cannabis-based business.<\/p>\n As of July 2022, the map below accurately describes each state\u2019s cannabis laws:<\/p>\nTaking Care of Business: Cannabis Retailers and Real Estate<\/h2>\n
Storefront Locations and Looks<\/h2>\n
Commercial Development Strategies Used by Dispensaries\u00a0<\/h3>\n
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Cannabis Businesses and NIMBYs (Not In My Back Yard)<\/h2>\n
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National Cannabis Legislation<\/h2>\n
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