Growing commercial cannabis has difficulties – from providing plants with the right amount of light to monitoring growth and health, the process itself is intensive. Even though recreational and medical marijuana are legal in some states, because it isn’t on the federal level, commercial growers often run into problems finding real estate. Even in states where cannabis production is legal, because of different zoning regulations and landlord discretion, finding real estate may be the hardest part of growing commercial cannabis.
Finding Real Estate for Growing Commercial Cannabis
In many of the states where growing commercial cannabis is legal, whether for medical or recreational use, land use zoning and regulations don’t make finding real estate an easy process. Because the rules regulating marijuana are so new, dynamic and still under scrutiny in many areas, commercial growers must keep up on the latest regulations by city, county and state.
Difficulties Securing Real Estate for Commercial Cannabis
- Land use regulations vary by municipality
- Zoning – Depending on the area, grow sites may be limited to industrial, farming only or non-residential properties
- Many landlords have concerns about energy and water use by commercial cannabis grow sites
- Finding and upgrading a space to accommodate high voltage grow lights, ventilation systems and water consumption
- Cost – To account for risks, some property owners charge 20 to 40 percent more per square foot for commercial cannabis grow site property
- Landlords control how their property is used, which means they can bar the cultivation and use of cannabis on their property
- Competition – In certain markets, finding commercial real estate becomes even more difficult when competing against other cannabis businesses for limited spaces
When seeking real estate for growing commercial cannabis, growers need to be able to move quickly. Because there are so many obstacles in the way, it’s essential to have finances in order and business plans in place. Landlords want to see that you a legitimate business and in competitive markets like Portland, Oregon, for example, you need to be able to compete with multiple offers.
Even though there is no concrete data on how marijuana businesses affect commercial real estate values, property owners fear a decrease may result, which makes them hesitant to rent to growers and dispensaries. The looming fear of property owners paired with the ongoing stigma of marijuana makes it difficult for growers to find real estate for growing commercial cannabis.