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How Do You Think Legalizing Marijuana Will Impact Agro and Comm RE?

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Real Estate Broker/Owner with CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments 521400, 1501015, 01795582

How Do You Think Legalizing Marijuana

Will Impact Agro and Comm RE?

 

Anyone have any thoughts on the legalization of Marijuana and how it might impact or influence the agricultural and commercial real estate market? 

 

I know this is a very sensitive, legal, economic and in many cases moral issue and a little different for a venue such as AR. But I have to ask it anyway. In the past few years we've become involved in the commercial RE arena largely by default as we own and manage a portfolio of commercial RE.

 

I'm also aware that AR caters primarily to the residential real estate market. However, there are thousands of agricultural and rural properties throughout the USA (especially Colorado and Oregon and 14 other states that are fast approaching the legalization of Marijuana) that could be impacted one way or another by this.

 

Recently, we've been approached by some folks who are looking for places to legally operate Marijuana dispensaries and we happen to have some properties that are in that path.

 

My question is, (I'm not seeking legal advice as we already have our attorney on top of this) would you as a property owner be willing to lease/rent your property out to this type of tenant if you were not directly involved with the distribution or sales end of it?

 

It's a tempting opportunity as they are willing to sign some very attractive and lucrative NNN leases and should there ever be any reversals in local, city, county or state laws or enforcement of the Federal Mandate the property could still be leased quite readily albeit not as profitably as it's in the path of progress and garners quality long term tenants.

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John DL Arendsen, Broker, General & Manufactured Home Contractor and Dealer 

TAG Real Estate Sales & Investments

TAG (The Arendsen Group) Real Estate Sales & Investments is a full service, one-stop, turnkey, family owned and operated real estate brokerage, General Contractor, Manufactured Home Contractor, Developer, Investor, Property Manager, Interior Design, Engineering, architectural, Landscape design, Expert Witness, Consulting, Curative Title and Troubleshooting company with over 100 years of combined experience in the San Diego real estate sales, construction, design & development arena.

 

 

 

 

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Comments (8)

Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi John - Legal weed has had a big impact on commercial real estate here in Colorado, and not just for dispensaries. Most of the growing operations are indoors and that has led to increased demand for large warehouse space adaptable to grow operations.

There have been some concerns about both types of operations, primarily because of security issues. Because of the difficulty dispensaries have in regards to establishing bank accounts - because the business is still illegal in Federal law - there's way too much cash on hand for comfort.

We have also seen some impacts from personal grow operations in residential real estate - that's an area that is a lot more sketchy. When you can legally grow 12 plants, but only possess 1 ounce, the question of what happens to the excess gets pretty interesting. A lot of it winds up in the hands of illegal dealers, who are still very much around.

To answer your question, but only in regards to the market here, most dispensaries and grow ops are good tenants - they don't want to ruin a very good thing. And they certainly have the cash to pay the rent. I'd lease to them.

Oct 23, 2015 05:50 AM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

As an investment specialist I would build for lease these types of properties. I doubt that Oklahoma will embrace this, in fact one of the last states to do it would probably be us.

Oct 23, 2015 06:32 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Dick Greenberg 

Interesting. I'm very familiar with what's happening in Colorado. In fact we'll be in Denver on Tuesday to meet with the CEO of a publicly held company that has established a subsidiary that is selling stock and warrants for 100,000sf totally environmentally controlled green houses.

We will be driving to Pueble on Wednesday to see his first operational green house. He's now raising money to build from 2-4 more by the end of '16. I'm thinking that will certainly give enclosed warehouses and grow lights a run for their money. Don't you?

Oct 23, 2015 09:28 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Joe Pryor I'm starting to meet and converse with a lot of folks who don't even use MJ but are very interested in capatilizing on it in some way.

Oct 23, 2015 09:30 AM
Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Colorado Broker / Referral Services

Dick Greenberg, you are so right about the banking issues due to the Fed level.  We are hearing a few Colo local banks are working on the legal aspect to handle this business for the dispensaries and growers.

Oct 24, 2015 02:21 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Dan Hopper, I too have been hearing the drums beating in the distance. I've been hearing that some of the State chartered credit unions are toying with how to deal with it. 

I'm sure in the long run banks will see the billions of $$$'s that they will have the opportunity to deal with. Personally I think the FED is only a couple of elections away from acquiescing.

The train has already left the station and gaining speed and momentum. We all know how hard it is to stop a speeding locomotive if you'll indulge my metaphor. 

Oct 24, 2015 03:02 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I have mixed feelings about legalizing marijuana.  My main concern is the security issues that Dick Greenberg mentions.  I also think the cartels that have smuggled the stuff into the country in the past, will simply shift to more dangerous drugs instead.

Oct 24, 2015 11:25 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Myrl Jeffcoat 

Personally I haven't consumed or smoked pot for decades. However, I've always felt a little bit the opposite about the black market influence. I've always thought that Pot should be in the same mixed bag that alcohol and tabacco in.

Folks who want to consume it are going to do so and the only way they've been able to do so was by associating with drug dealers who were operating outside the law and no doubt able to score their customers just about anything illigal that they might want.

 

Oct 25, 2015 12:13 AM