The Impact Of Cannabis On Commercial Real Estate Demand In 2023

By Author: Sativa Bliss Canabis
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Businesses catering to customers interested in purchasing marijuana for either medical or recreational purposes expanded as the number of states that had passed laws legalizing the drug grew. Commercial real estate demand has been affected, and there's a chance that it will continue to grow nationwide as more states consider formally legalizing cannabis.

High levels of interest in commercial properties

Given that legal recreational cannabis is now a $15 billion dollar industry, with that figure expected to exceed $25 billion in just three years, the combined medical and recreational marijuana businesses are actively influencing commercial real estate demand in 2022.

Retail rental and purchase demand has grown to levels that many owners of commercial real estate, from freestanding stores to strip malls, did not anticipate. Demand for storage warehouses has skyrocketed.

As such, the following sections will acquaint commercial real estate managers and owners with the requirements of cannabis-based businesses, as well as the states where such businesses are legal and actively seeking retail and/or warehouse ...
... space.

More and more shops began selling marijuana for medical or recreational purposes, or both, as the number of states that had legalized the drug grew. The market for commercial real estate has been affected, and there is hope for further nationwide expansion as additional states explore fully legalizing cannabis.

Increased Interest in Commercial Properties

Commercial real estate demand in 2022 is being significantly influenced by the combined medicinal and recreational marijuana industries. The legal recreational cannabis market is now worth $15 billion, with that number predicted to surpass $25 billion in only three years.

The demand for retail rental and purchase space has increased to an extent that many owners of commercial real estate, from freestanding stores to strip malls, did not anticipate. The need for storage warehouses is rising rapidly.

In the sections that follow, we'll familiarize commercial real estate managers and owners with the requirements of cannabis-based enterprises, as well as the states where such businesses are legal and actively seeking retail and/or warehouse space.

The cannabis industry is highly regulated, making the licensing process difficult.

These can change not only from state to state, but also from business category to business category, and from county to county, in the case of cannabis retailers.

Before offering a commercial property for sale or rent to a cannabis-based business, it is important to check city and county zoning laws.

Visual Aspects and Storefront Positioning

Managers of cannabis dispensaries typically see a storefront with a layout not dissimilar from that of a pharmacy or a supplier of other medically-related services, such as those offering non-invasive cosmetic operations or intravenous vitamin therapy.

The interiors of recreational marijuana stores are frequently modeled like those of medical marijuana dispensaries.

This is because packaging for both recreational and medical marijuana is frequently confusingly identical.

Recreational marijuana dispensaries is a term used by some businesses that sell cannabis for that purpose.

Dispensaries' Approaches to Business Growth

Property managers and brokers may be asked to provide input during the build-out and provide names of contractors who are interested in working on rented property.

New dispensaries won't always need a grand opening celebration and a construction crew. A small number of businesses have deviated from the norm by "re-purposing" empty commercial spaces that once housed another company.

The Problem with Canna-Businesses and No-In My-Backyarders (Not In My Back Yard)

Even though most people in the United States agree that medical marijuana should be legalized, some of them still don't want to do business near dispensaries.

The National Association of Realtors (NAR) collected information from members who work or invest in commercial real estate and found the following patterns.

- Some renters don't want to be in close proximity to a dispensary, according to 22% of members in places where medicinal marijuana is permitted.
- In the last four years, 28% of members in states where cannabis is legal for both medical and recreational use have become aware of this trend.
- In places where medical and recreational cannabis use were allowed at the same time more than four years ago, this figure climbs to 38 percent.
- The most prevalent concern among potential neighboring businesses: The smell of marijuana being recognized/detected by their customers.

Commercial real estate agents and brokers, before showing retail or warehouse space to a cannabis-based firm, should get feedback from current tenants, as was described above.