Indoor cannabis cultivation may well have a limited future, many marijuana professionals say, but it’s booming right now based on demand by commercial growers for warehouse space.
That has pushed up prices for such properties, meaning that MJ entrepreneurs seeking to build indoor cultivation centers will have to pony up more to pay for real estate.
This is particularly true in states that passed recreational marijuana measures last year, namely California, Maine, Massachusetts and Nevada, according to National Real Estate Investor (NREI).
According to the trade publication, investors in new rec MJ states are “rushing to buy up industrial properties in cities” that permit marijuana cultivation businesses.
The result has been a dramatic spike in property values, with investors willing to pay premium prices for some spaces, according to NREI.
For example, former planning commissioner-turned-cannabis real estate consultant Jim Fitzpatrick told NREI that industrial property values in Costa Mesa and Santa Ana, two cities in Orange County, California, have “nearly doubled” in the past 12 months.
While many municipalities have banned cannabis, Fitzpatrick predicted those cities will lift their prohibitions once officials see neighboring towns with marijuana businesses prospering.
“As other cities get on board, demand will go down, and prices with it,” Fitzpatrick told the publication.