How Will Cannabis affect Real Estate?
In America, in the medical industry marijuana has been accepted and legalized. In the USA, nine states have declared marijuana to be legal for their recreational use. The legal cannabis industry is continually growing and becoming a big business for sellers and growers and now the real estate industry. There is a realization of how the real estate is being affected by the cannabis industry impact. Rent and sales rates have increased in facilities and warehouses where the cannabis industry is marketed either for medicinal or recreational use.
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.
In as much as there are many opportunities surrounding real estate, marijuana legalization for recreational and medicinal uses brings about some issues on the transactions of real estate with sellers and growers and with managers, property owners, tenants who must deal with issues on the right for growth and consumption of marijuana, and security concerns.
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. Since we know that marijuana is not fully legalized federally, financial institutions may not be available to offer finances for acquiring and retrofitting of the buildings to be used, hence property owners must peruse the bank documents before renting out the buildings to be used by the cannabis industry on if the users will be limited or prohibited in any way.
Marijuana involvement require a different type of insurance because of the of the high flammable and lot of water use and the much-needed security. Tenants and owners should ensure that there is a property and liability insurance in place and a worker’s compensation.
Where insurance is not available, tenants may be expected to insure themselves or get covered by firms that accept the cannabis industry. Once a property that will be used by marijuana users may have to take up insurance for the property because not all insurance companies cover such business that deals marijuana.
Cannabis business will take over the real estate in the decade to come especially if it is legalized in several other states and nations with the sole factor of its medicinal benefits.