November 9, 2016
Now that cannabis is legal for recreational use in California, it is expected to stimulate business, especially in the CRE sector. Recreational marijuana sales could exceed $22 billion in the U.S. by 2020, with California generating $7.6 billion of that.
But beyond the sales tax boost, California’s industrial and retail sectors are expected to see a significant increase in demand. Investors are already acquiring properties to build cultivation centers, and the industry is expected to some day rival Silicon Valley’s tech sector.
Denver and Portland experienced land-grabs for industrial and retail space, especially in dense urban markets.
Rents exceeded market prices since Oregon passed its pot law. The marijuana industry accounted for 35.8% of Denver’s newly occupied and constructed industrial space between 2009 and 2014. That demand doubled prices for Class C manufacturing buildings.
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