Many proponents of pot legalization were dismayed by the Florida Supreme Court’s recent decision to shelve a ballot measure that would have allowed Floridians to vote on recreational sales.
But medical marijuana, which Florida voters approved in 2016, continues to be a major economic boon for U.S. states that have yet to legalize recreational pot.
That’s especially true during the pandemic-induced recession, which saw medical marijuana providing much-needed commerce and jobs, according to George Scorsis, CEO and executive chair of Canadian cannabis producer, WeedMD.
“It’s always easy to talk about successful business sectors, but there’s a deeper significance to recession-proof industries because they boost the economy when people are most desperate for good news,” George Scorsis said. “There’s plenty of evidence to suggest that medical marijuana has done that during the COVID-19 pandemic.”
In Florida, the Commercial Observer reported that medical marijuana has helped buoy the struggling real estate sector. Landlords from Miami to Palm Beach County have said that hundreds of new medical dispensaries have helped keep them afloat.
Since 2016, pot producers have bought offices for 330 dispensaries throughout Florida, creating jobs, generating tax revenue, and injecting income into the office space sector of real estate, which has been hit hardest by the stay-at-home measures and rise of remote work caused by social distancing during the pandemic.
It’s true in other states as well.
With the election of President Joe Biden and Democratic wins in Georgia, more and more investors are excited about the prospect of investing in cannabis-related real estate, according to the Green Light Law Group, a group of lawyers who specialize in the emerging U.S. cannabis industry.
That’s because the primary concern over investment in dispensaries is the ongoing barriers created by federal regulations, which continues to make banking and finance a tricky proposition for the cannabis industry. Also, many title companies will not issue close transactions or issue title insurance for properties with cannabis businesses, according to the Green Light Law Group article.
But with the growing possibility of federal legalization in the near future, there’s good reason for investors to be excited about investing in marijuana-related real estate, Scorsis said.
“Smart investors want to get in on the ground floor of emerging industries, preferably right before the business explodes and everyone wants in,” he said. “There’s plenty of reason to be excited about what medical marijuana is already providing economically, but many investors are looking to the future. If and when federal legalization happens, the industry will likely see explosive growth.”
With or without the federal barriers removed, there are other reasons why marijuana makes for a lucrative real estate investment.
Once a marijuana business builds its infrastructure in a specific location, it’s unlikely to move because of the regulatory challenges. Also, most pot producers must pay for large-scale property improvements to create productive environments for the plants, which also increases property values.
That’s a boon for both real estate companies and homeowners, who have seen increases in property value just from legalization, according to a study from Clever Real Estate.
After analyzing data from the popular real estate website Zillow, researchers at Clever concluded that property values in U.S. states with some level of pot legalization were about $6,000 more than states where any kind of pot possession is still a crime.
“One of the most interesting things about our ongoing understanding of the pot industry are these big, positive impacts that aren’t always clear at the moment of legalization,” Scorsis said. “At the moment, there’s lots of good news about its impact on real estate. But as this industry inevitably expands, I think we’re going to see even more positives for the economy and everyday people.”