Cannabis Today – The Boom
Currently, 36 states, the District of Columbia, and 4 out of 5 U.S. territories have legalized the use of cannabis for medical purposes. Additionally, 18 states and the District of Columbia have legalized cannabis for recreational use, including New Jersey. The steady growth in sales of legal cannabis in the United States has proven to be big business, not only for the growers and sellers, but also for owners of real estate holding inventory well suited to serve the growing industry. 2020 was a breakout year with legal sales across the country hitting a record of $17.5 billion, a 46% increase from 2019. The current trend suggests the projected legal sales of cannabis by 2025 in excess of $40 billion.
Investment trusts and other multistate real estate investment vehicles are being used to provide real estate capital for the cannabis industry, including acquiring real estate for conversion or development to industrial and greenhouse buildings, which are then leased to growers in the cannabis industry. Similarly, other real estate investors, even if at a much smaller scale, are likely to pursue the developing real estate opportunities surrounding the cannabis industry. New Jersey landlords should prepare themselves for the ongoing cannabis boom by becoming knowledgeable of the potential issues in real estate leasing transactions with growers and sellers of cannabis.
Retrofitting Commercial Space for Cannabis Tenants
Owners of factories, warehouses, self-storage facilities, and other industrial-type facilities which may have sat idle are experiencing a renaissance in interest due, in large part, to the increased need for facilities able to be repurposed for the cultivation and processing of cannabis plants and related products. As cannabis becomes more widely accepted, for both medical and recreational uses, spaces that can be converted into retail and growing use for the cannabis industry are likely to see increased real estate transactional activity. The opportunities presented by the legalization of cannabis to repurpose dormant space seem endless.