There is an increase in purchasing properties for marijuana-related businesses instead of leasing.
The warehouse space is already in demand. Overall, the industrial sector had record-high rents hovering at $6.90 per square foot nationally in Q1, according to a report by Cushman & Wakefield.
But the marijuana business is only adding to that frenzy in states where it is legal, according to a study from the National Association of Realtors.
Nearly half of the states where marijuana was legalized before 2016 have seen lease addendums that restrict growing on properties. In states where medical marijuana is lawful, 69% of commercial members said no additional addendums were inserted into their leases concerning marijuana plants. In states where medical and recreational use is legal, 45% to 55% of those surveyed said no additional clauses were added to leases.
These addendums could be pushing those in the marijuana industry to buy instead of lease, especially in states where marijuana is newly legal. In states where the drug was legalized the longest, one-third of respondents cited the marijuana demand because inventory was tight. In states where it was recently legalized, 23% blamed marijuana for limited inventory. In states where recreational marijuana was legalized in the past four years, 29% of commercial members reported growth in property purchasing over leasing in the last year.
Overall, in the states where prescription and recreational marijuana use is legal, demand seemed to jump. In those states, 35 to 36% of NAR members had seen increased demand in warehouses, 23% saw a rise in storefront demand, and 18 to 28 percent noted more demand for land.
In states where prescription marijuana use is legal, 27% of members noted an increased demand in warehouses, 24% saw a rise in storefront demand and 18% saw more demand for land.
When commercial properties were near dispensaries, more than one-third of members did not see a change in property values. In states where medical and recreational marijuana are legal, nearly 60% noted no change in property values. Further, 11% to 13% of members saw an increase in commercial property values near dispensaries, while five to 14% have noted a decrease.
In states where marijuana is legal to some extent, one quarter or more members had not seen a change in commercial property values near growing lands. More respondents, 14% to 16%, saw an increase in commercial property values near growing lands, while only 2% to eleven percent noted a decrease.
For some people, there is still a negative connotation about being near a dispensary. NAR noted that 22% of commercial members where only medical marijuana is legal said some tenants do not want to be near a dispensary. That number jumps to 38% in states where both were legalized more than four years ago.