Commercial real estate brokers expect higher prices as demand for marijuana business space increases

Real Estate

ROCHESTER, N.Y. (WROC) — Marijuana is officially legal in New York State but there are many business people who have been preparing for this day for awhile.

Dara Rennert is a commercial broker with Keller Williams Commercial. She said many people looking to get into the marijuana industry have been scouting locations for more than a year.

She said they’re expecting huge growth in the commercial real estate sector and expect to see prices increase as demand for this type of space increases.

“There’s going to be tremendous demand suddenly for property so whether that’s industrial property where we already have shortage or for retail where you’re seeing a lot of changing and growth in retail sectors,” Rennert said.

She said clients of hers have bought everything from warehouse to retail space but said finding landlords ready to welcome these types of tenants isn’t always easy.

“It will affect their insurance policies and coverage and there’s still that unknown question if its legal in the state but it’s still illegal by the federal what would that mean with the coverage and making a tenant legal in obtaining permits.”

Attorney Brett Dawson said interested applicants will need to show a physical location or a lease before being licensed. He said the law states people from communities that have been most impacted by marijuana incarceration laws will get priority in the application process and extra priority will go to those who have personally gone to jail for possession, or have family members who have.

“There’s gonna be priority given for socially disadvantaged areas, people with lower income as well as certain qualifications for individuals there, so from a physical standpoint you’re gonna need to have your space and you’re going to need to have it under lease for an extended period of time before you actually get your license,” said Dawson.

He said he’s been fielding 10 to 15 calls per day since the legalization started becoming reality.

“It’s kind of like the repeal of the Volstead Act when they ended alcohol prohibition, it’s gonna be like the Gold Rush for a little bit where everybody wants to get into it.”

He said we shouldn’t expect to see these stores and warehouses pop up right away. The state office of cannabis management will need to established, applications will go out, then people will be selected to be licensed.

He said even once people are approved, there will be a set date for all licensed retailers to open.

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