Another marijuana expert chimes in on marijuana real-estate outlook for the year ahead -
Ryan R. George, CEO of 420 Property, forecasts a continuation of the land rush: “2017 is going to be a major growth year in cannabis real estate. The land rush began mid 2016 as those in the industry and property investors started to acquire land and facilities suitable for cannabis cultivation in anticipation of new Cannabis Reforms being passed in the 2016 Elections. That land rush went from warm to blazing after the election and new cannabis laws were passed. Cannabis is now being recognized as a viable business opportunity and everyone, from the stoner on the street corner puffing a ‘j’ to your sophisticated ‘suits’ on Wall Street, wants a piece of the action.”
“Those with the means and the forethought are tackling the biggest problem even the most talented cannabis operators face: real estate. As I mentioned in our previous conversation, there is simply not enough compliant or suitable cannabis facilities to meet the current demand,” he continued.
“From what I have seen, investors are more willing than ever to get involved in cannabis — like a child with a new toy; this has helped ease some of the financing difficulties our clients have faced at 420 Property Financing. However, easier terms for financing are also fueling a price war and I expect to see cannabis properties appreciate another 20 [percent] to 30 percent, and leases on cannabis space to rise another 10 [percent] to 15 percent in 2017. There is bittersweet real estate hope for cannabis operators, but it's not exactly what they will want to hear and it's not coming for another five to seven years,” George went on.
“Prices on cannabis leases and properties will correct, but this will only come after the amount of competition in the industry forces diminishing profit margins on operators as the wholesale value of cannabis drops. Then we will see a correction in the cannabis real estate bubble. But as profit margins remain high, expect high valuations and rents,” the expert ended.
