LATEST NEWS

States That Legalized Marijuana Are Living The High Life With A Real Estate Revolution

Legal weed makes certain kinds of real estate very much in demand.

By Jeff Vasishta November 10, 2016

There was a time when growing marijuana was a high stakes gamble. Now though, with more and more states legalizing pot, growers are facing problems that would have once seemed unthinkable. They are running out of warehouses in which to grow it. Given the cash on cash return for marijuana—marijuana sales were $700 million in Colorado in 2014 and $996 million a year later—it’s the green plant that’s worth sacrificing your kale and wheat grass harvest. Warehouse vacancy rates in the state fell from 7.6% in 2011 to just 3.1% in early 2015. Finding places in which to grow the stuff is shooting sales prices into the stratosphere.

Related: Manhattan Real Estate Sales: Temperatures Aren’t The Only Thing Dropping

Warehouse sizes of under 80,000 square feet are optimal for weed growth (not the kind that grow in your lawn). CBRE reports that the average lease rates industrial properties in Denver for reached $8.40 per square foot, over $2.00 more than the national average. When California’s Proposition 64 to legalize marijuana passed, the State most associated with the hippy culture is about to get high on its own supply. Finding places to grow it year round is soon to light up the commercial real estate market across the Sunshine State.

Loan reps at commercial banks are approving funding for warehouse purchases like they took a walk through the grow rooms before signing the docs. Forbes broke down numbers. But it’s not just warehouse sales and leases that will benefit. Throughout the legalized states, houses with large back yards and basements are becoming hot property.

In Colorado, where homeowners can grow up to six plants at a time for personal use, legal weed is changing the way people buy and sell homes.

“Basements have become very important,” John Grove, a Re/Max agent in Pueblo, Colo., told the local Daily Chieftainas as reported in the Huffington Post. He believes marijuana has something to do with a 12 percent spike in local house prices over the past year.

“We get lots of calls from out of state. Every day we’re showing properties. Part of it is Pueblo County has a reputation for having an open-door policy on pot businesses, so we sort of stick out like a sore thumb.”

“It’s the green boom here in Colorado and real estate is at a premium,” Sally Vander Veer, CFO of Colorado-based Medicine Man, told Inc magazine earlier this year and she wasn’t referring to solar panels.  “If you own a building that is zoned properly, not including any improvements, it’s worth millions.”\

The high life indeed.

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

  • AGORAFY
    Avocado toasts are the reason why millennials can’t afford a home, says one Australian real estate developer. #AvocadoToast #Millennials https://goo.gl/TBCPnv
  • AGORAFY
    Five years on since Superstorm Sandy, Queens’ coastal peninsula is in the midst of a development boom. #Development #Rockaways https://goo.gl/BRKRrD
  • AGORAFY
    It turns out, renters can’t get enough of good ol’ no-doorman-no-frills apartments. Too bad developers aren’t building any. #Doorman #LuxuryRentals https://goo.gl/pdnbo6
The Housing Market In Shenzhen, The Silicon Valley of China, Slows In 2017
The city of Shenzhen has been on the real estate radar for quite some time. It is known as the Silicon Valley of China. Many…
Developers Jump Aboard The Trend To Revamp Transit Hubs And Remake Cities
Never has the often used marketing term, “close to transportation” been more important when attracting home buyers. These days it’s not just homes that are…
Millennials Are Fueling The Current Sizzling Real Estate Market
Ever wondered why the hosts of home improvement shows seem to be getting progressively younger, along with the fresh-faced couples getting their new properties made…
The Best Cities For Recent Grads To Rent – Without Blowing Their Entire Paycheck
What’s next post graduation? For most, the logical answer is to find a job. After the excitement of finishing your studies and the big celebration,…
Luxury Knows No Limit In Malaysia As A Deluge Of New Developments Hit The Market
The amount of newly constructed high-end real estate in Malaysia is almost as abundant as the lush vegetation which covers the tropical landscape. Despite vacant…
Don’t Call It A Commune – Upscale Co-Living Is Attracting Major Development
What may have once been referred to as a commune is today termed a co-living space. The big news that it’s not hippies with hemp…
It’s Official—New York Is Now The Most Expensive City In The World To Build
As if you didn’t already know, it’s expensive to build in New York City. Not just expensive but now officially the most expensive place in…
An Ultimate Destination For The Most Comprehensive Real Estate Data, Agorafy Prepares To Launch Nationwide
In the coming days, Agorafy will be entering a new chapter. It is the beginning of a new growth cycle in real estate technology with…

TOP 10