Monday, March 17, 2014

Is Marijuana the new “Pot of Gold” for Real Estate

Oh happy day!
Since recreational marijuana became legalized in Colorado, hordes of new residents have relocated to the Centennial State, and in Denver alone, more than 4.5 million square feet of space has been dedicated for commercial cultivation facilities, storage and distribution, and retail shops. Talk about your Mile High City - that’s over 78 football fields for you Bronco fans!

Commercial and residential purchasers in Colorado urban areas are scrambling to find new locations, something that is much easier said than done with the restrictions in place for local zoning ordinances. Prices have already zoomed for both residential and commercial real estate, and commercial real estate, in particular, is in short demand.

As a consequence of that shortage, the Las Vegas real estate market is already seeing the early stages of a new boom driven by cannabis consumers. Even though medical marijuana applications have a temporary moratorium in place, experts in the industry expect to have recreational marijuana legalized by 2016 at the latest. After seeing what happened in Colorado, investors are already staking their claim to prime locations in Las Vegas. (In order to accommodate these investors more efficiently, we are already developing our new web site for Las Vegas Marijuana Real Estate. Updates to current zoning regulations should be posted by the beginning of April.)

We have gotten numerous calls from national name brand companies that are diversifying their portfolios into what looks to be a highly lucrative new “field.” (Sorry for all the bad puns, but I can’t seem to help myself!) Quite a number have already tied up commercial warehouse space in Clark County for future cultivation facilities.

But don’t expect to see a boatload of marijuana dispensaries along Las Vegas Boulevard. Though the Strip and downtown Fremont Street would seem logical spots for retail pot shops, marijuana sales are prohibited in any of the gaming corridors, in addition to the normal zoning restrictions about being close to churches or schools.

Another more subjective concern is that local authorities do not want to bring potential crime into what are now low crime areas. That means you won’t be seeing a retail shop near Summerlin homes or close to Anthem Country Club any time soon, even once both medical marijuana and recreational marijuana are legalized. You’ll probably have to drive a bit to get to your favorite dispensary.

And individual homeowner’s associations may/will prohibit growing marijuana crops in private homes. If you want “room to grow” you may need to look for a house outside of an HOA. It actually might not be a bad idea to start looking right now for a potential grow home. We expect to see a residential population shift to the unincorporated areas of Clark County once recreational MJ is legalized, which will drive up prices in the non HOA communities. You don’t want to be priced out of that market and have your dreams go “up in smoke.”