by Jodi Summerscalifornia bud

Next year, California is going to get legal marijuana, and both industrial and retail real estate sectors stand to benefit from pot’s legalization. Now the big project is for users and investors to find properties in legally acceptable locations.

“Marijuana legalization is a boost to industrial absorption in the states that legalize it, observes Ten-X Real Estate’s senior quantitative strategist Chris Muoio. “Growing at scale requires a lot of space with a consistent climate, which is a need that is perfectly met by large warehouse space.”

Growers are most interested in warehouses smaller than 80,000 square feet, according to the Wall Street Journal. In Southern California, between 8,000 square feet and 20,000 square feet is the sweet spot size for indoor marijuana farms. This size range is ideal for growing marijuana as well as packaging and storing it. Beyond the plant itself, the edibles business marijuana warehouseuses industrial space for cooking, packaging and distribution. In the marijuana business, we even know about industrial space that is being used for cash storage, as this business does not currently have access to the banking system.

Recreational use of marijuana was legalized in Colorado in 2012. Mark Bowen, vice president of the Denver office of DCT Industrial Trust investors, notes that the marijuana industry has driven up the cost of warehouse space by 60% or more and increased lease renewal rates by 25%.

Since California passed Prop 64 in the 2016 election cycle, marijuana friendly industrial real estate has seen an increase in value. One property owner recently got an offer of $1 million for a legal-to-grow 2.5-acre parcel in desert hot springs future grow siteDesert Hot Springs – a price of nearly 3x what they paid for the property in 2015. And, this is just the start. Recreational marijuana laws don’t even go into effect in 2018.

“If you have the right parcel with utilities in the right jurisdiction, your land will definitely appreciate as a result of Prop 64,” investors reveal.

Restrictions are making real estate prices skyrocket and finding any place to sell medical marijuana is hard, let alone one that is affordable. Properties for marijuana can go for more than double the market value.

pot store counterIt is estimated that California’s cannabis industry could grow to $6.5 billion by 2020, making California the largest market for legal marijuana in the world, by a long shot.

Expect legalization to also be a boost to the retail sector, which desperately needs destination-based product to get people coming back to the stores. Optimists would like to see marijuana shops proliferate like liquor stores. Pundits envision increased absorption in the retail sector, which will in turn lower vacancies and drive up rents. That’s only if the change the location laws so these shops can be closer to schools and parks.

The experts conclude that markets which are legalizing marijuana are providing their industrial and retail markets MJ-plants-1455x1940with an additional catalyst to drive absorption and fundamentals that should be fairly agnostic to economic cycles.

Before you get out your checkbook and start writing for joy, remember loans are hard to come by. One of the constraints still facing the marijuana industry is that while it is now legal at the state level, it’s still illegal at the federal level – and this has resulted in the financial industry being unwilling to loan for cannabis. This may change soon. After the last election cycle, more than after the states in the country have supported medicinal marijuana, so those rules may change soon. In the meantime, the marijuana business financing is still the wild, wild West. This has left the space struggling to find banking solutions and operating underground or highly in cash.

warehouse growth

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http://www.globest.com/sites/carrierossenfeld/2016/11/08/how-legalizing-marijuana-could-impact-cre/?kw=How%20Legalizing%20Marijuana%20Could%20Impact%20CRE&et=editorial&bu=REM&cn=20161108&src=EMC-Email&pt=California&slreturn=20161008114639

http://www.lovesiliconbeach.com/legalized-marijuana-will-impact-local-real-estate/

http://www.forbes.com/sites/elyrazin/2016/11/03/how-marijuana-legalization-is-ultimately-a-real-estate-story-and-what-that-means-for-california/#4d9b339c641b

http://www.socalcommercialrealestateblog.com/legalized-marijuana-and-commercial-real-estate/

http://www.marketplace.org/2016/12/10/economy/real-estate-industry-smells-big-money-marijuana

http://www.socalcommercialrealestateblog.com/legalized-marijuana-and-commercial-real-estate/

https://www.entrepreneur.com/article/286307

https://tokesignals.com/wp-content/uploads/2016/09/california-marijuana-leaf.jpg

http://9606l1dekzg1la0iv1bxdplx.wpengine.netdna-cdn.com/files/2015/04/california.jpg

http://blogs-images.forbes.com/julieweed/files/2015/03/MJ-plants-1455×1940.jpg

http://www.sacbee.com/news/state/california/california-weed/i0j38m/picture65724452/ALTERNATES/FREE_640/1_AS_021617_pot0141

https://www.420magazine.com/gallery/data/1412/15754.jpg

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https://www.thefix.com/sites/default/files/pot%20store%20counter.jpeg

http://misterbuds.buzz/wp-content/uploads/2015/05/IMG_1966-1100×500.jpgcalifornia bud

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About Jodi Summers

Jodi Summers Sotheby’s International Realty 310.392.1211 jodis@jodisummers.com www.SoCalInvestmentRealEstate.com www.SantaMonicaLandmarks.com www.SoCalIndustrialRealEstateBlog.com www.SoCalOfficeRealEstateBlog.com www.SoCalGreenRealEstateBlog.com www.SantaMonicaPropertyBlog.com Jodi Summers Bio With $100,000,000 in listed inventory, Jodi Summers understands the coastal commercial real estate market. A top producer with Sotheby’s International Realty, Jodi knows finance, rules, regulations, procedures and methods. She is accurate, knowledgeable, timely and aware of how government shapes the cities of Southern California. Jodi is born in Brooklyn, raised in and around Manhattan – the family business was marketing, Madison Avenue style. Childhood math quiz questions calculated demographic and psychographic percentages or analyzed the allocation of adverting dollars. Word games were for devising slogans. An honors graduate from the Walter Cronkite School of Journalism at Arizona State University, Jodi moved to California to achieve her goal of living by the beach with a palm tree and a hibiscus bush in her yard. She thrived as an entrepreneur in the entertainment, media and marketing industries. One of her books, “Marking and Marketing Music,” is in second edition. “My marketing and communication skills have proven to be a true gift when it comes to promoting real estate,” observes Jodi. “And I am consistently able to get an exceptionally high price per square foot for my sellers.” Discipline (Jodi holds a Black Belt in Tae Kwon Do), organization, motivation, excellent communication skills and knowing & satisfying the needs of her clients have been her essentials for running a successful business. A passion for investment real estate explains her emphasis in asset-yielding properties. Her team joined Sotheby’s International Realty for the company’s powerful brand and stellar reputation. “We offer the broad market knowledge needed to assist clients in formulating a sound acquisition strategy,” Jodi amplifies. “Together, we evaluate various markets, property types and neighborhoods to devise a customized approach that meets each client's specific objectives.” Jodi is a member of the Action Apartment Association of Westside income property owners, the Santa Monica Conservancy historic preservation society, the Ocean Park Association, the Friends of Sunset Park community group, the Real Estate Investors Club of L.A., and the Culver City Rock & Mineral Club. Members of her team are fluent in Spanish and Italian. “Our reputation assures your satisfaction.”

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