When the idea was advanced that New Jersey might become the region’s first legalized marijuana marketplace, one of the auxiliary benefits proposed was that it had potential to lift real estate markets that may have gone overlooked.
As businesses hurried to set up shop, a wave of real estate deals would be a boon for all, it was said.
Attorney Gene Markin said that excitement has been fast fading.
“There still deals being done, but not at the level that was expected,” he said. “There’s a lot of discussion and information gathering right now, but outside of those with a whole lot of money, there’s very few that are actually locking things down at this moment.”
Markin is a partner at Stark & Stark in Lawrenceville, one of the many law firms now representing cannabis clients on matters including real estate transactions. He’s expecting real estate deals involving his clients in this new sector will become more regular with the policy component’s completion, but the current activity levels are low.
The plans for legalizing recreational use of marijuana and expanding the medical use program in New Jersey haven’t totally gone up in smoke, but the state Legislature has weighed its options for longer than anticipated and now faces a deadline at the end of the month to move a bill forward.
In the meantime, cannabis businesses remain in a dicey situation when it comes to purchasing properties.
“It still being very speculative creates issues for businesses looking to lock down good real estate,” Markin said. “Because, if they find a property tomorrow, can they afford to hold it and pay whatever holding costs might be for another few months or even a year before applications are awarded?”
The business decision is this: What’s the risk of losing a property with a wait-and-see approach versus losing capital to secure it now if legislation doesn’t come soon?