For medicinal purposes, marijuana has been legalized in around 28 states. In the USA, nine states have declared marijuana to be legal for their recreational use. The real estate industry, is also growing rapidly with the growth of legal cannabis business where even growers and sellers are expanding. There is a realization of how the real estate is being affected by the cannabis industry impact. For example, buildings and facilities where cannabis is being either sold for medicinal or recreation use there is an increase in rent or sales price premiums.
Agricultural, warehouse, storage facilities, and industrial facilities are best suited for cannabis industry are going through in influx in demand and interest which is as a result of the need for buildings for cannabis processing, cultivation or use by other cannabis-related products. Due to the continued growth of the industry, the demand and interest for the property that can be utilized for growth and retail of cannabis is expected to rise.
Despite the fact that there several opportunities all over the marijuana industry, as its legalization for recreational and medicinal uses grows there are problems with real estate business with sellers and growers such as property owners, managers and tenants must address and consider who has the right to grown and smoke cannabis, concerns over security and an increase in tighter security.
The retrofits needed for the cannabis products growth and cultivation and ability to generate the retrofits must be included along with the electrical, exhaust and climate control systems. Due to its illegality with some authorities there are banks that may not be ready to finance for the retrofitting of the properties to be used by the cannabis industry, so the owners of the property should check the finance documents before using or leasing the property on whether there are any limitations or prohibitions for cannabis users.
Insurance may have issues covering marijuana uses because of the tight security needed, the highly flammable processes not to mention the huge amount of water needed. Tenants and owners should ensure that there is a property and liability insurance in place and a worker’s compensation.
There are insurance companies that cover cannabis industry which is what landlords may expect tenants to obtain insurance from in case property insurance does not cover them. Property acquisition that will be associated or used with cannabis industry may cause property insurance because insurance companies will not cover any business including the property linked with the cannabis industry.
Cannabis business will take over the real estate in the decade to come especially if it is legalized in several other states and nations with the sole factor of its medicinal benefits.
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