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Real Estate Investment and its Link to Cannabis

Marijuana has been legalized in some 28 states due to its medicinal benefit. In the USA, nine states have declared marijuana to be legal for their recreational use. The real estate industry, is also growing rapidly with the growth of legal cannabis business where even growers and sellers are expanding. There is an impact being noticed between the growth of the cannabis industry and the real estate. By example, there is a marked rise in sale price rates and rents for facilities and properties that are specifically for the cannabis industry and where cannabis is being used for recreation or medical.

Agricultural, warehouse, storage facilities, and industrial facilities are best suited for cannabis industry are going through in influx in demand and interest which is as a result of the need for buildings for cannabis processing, cultivation or use by other cannabis-related products. A rise in the demand for buildings and farms for the growth and sale of cannabis as the growth of the industry increases.

Even if there are many openings for real estate on cannabis markets, the legalization of cannabis either for medicinal or recreation purposes brings about concerns in real estate operations with sellers and growers and managers, tenants, property owners who all must consider and address on who has the right to smoke and grow marijuana and issues on security.

The amount and extent of retrofits which that be expected to deal with cultivation and growth of marijuana products, the will to make the retrofits should be factored including electrical infrastructure, systems on climate control and exhaust systems. Due to its illegality with some authorities there are banks that may not be ready to finance for the retrofitting of the properties to be used by the cannabis industry, so the owners of the property should check the finance documents before using or leasing the property on whether there are any limitations or prohibitions for cannabis users.

Insurance may have issues covering marijuana uses because of the tight security needed, the highly flammable processes not to mention the huge amount of water needed. The availability of liability insurance must be confirmed by tenants and owners as well as workers’ compensation insurance.

There are insurance companies that cover cannabis industry which is what landlords may expect tenants to obtain insurance from in case property insurance does not cover them. Property acquisition that will be associated or used with cannabis industry may cause property insurance because insurance companies will not cover any business including the property linked with the cannabis industry.

The fact that there is the cure in marijuana to cure some diseases will make the cannabis business to thrive rapidly and may even overtake the real estate if it continually accepted as it is in more nations and states.

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