Governor Andrew Cuomo announced that New York will study whether it’s possible to legalize marijuana for recreational use as neighboring states move ahead. The study details include a look at the health, economic and criminal justice effects of legalizing marijuana. The study will also look at how marijuana legalization in neighboring states will affect New York.
Cannabis Commercial Real Estate
Cuomo’s announcement comes after nine states have legalized small amounts of marijuana for recreational use. Vermont is the 9th state to legalize adult-use marijuana, joining Colorado, Oregon, California, Washington, Nevada, Maine, Massachusetts and Washington, D.C. This growing list includes two of New York’s neighboring states: Massachusetts, whose voters approved legalized marijuana in 2016, and Vermont, where lawmakers recently voted in favor of it. Incoming New Jersey govenor Phil Murphy has also said he supports legalizing recreational marijuana.
The softening of state and federal drug laws in recent years has allowed the cannabis industry to flourish, posting close to $29 billion in sales in 2018 and projecting a reach of $20 billion by 2021.
Legalized marijuana doesn’t just benefit cannabis advocates. It can also be good for commercial real estate players, specifically, those who act on the industrial sector early enough to buy, finance or lease out warehouses that can be used for marijuana. Marijuana has a unique industrial use and because it is still illegal to transport marijuana across state lines, it must be grown in the state where it is sold. With the demands of consumers increasing and changing laws in more and more states allowing limited or open use of marijuana, there is an increased need, specifically in the industrial space to meet production requirements for cannabis-suitable real estate.
Factories, warehouses and self-storage facilities are being repurposed for the cultivation and processing of marijuana plants and products. Because growers have specific needs when it comes to their growing environment, such as climate control, privacy, security and a significant amount of square footage, many warehouses that have been sitting empty for years may soon have strong appeal. Warehouses must be large enough to hold thousands of plants, accommodate the needed climate controls, and be private and relatively easy to secure.
Ron Koenigsberg is the president of American Investment Properties, Garden City, N.Y.