Cannabis and Commercial Real Estate in South Florida
Is Medical Marijuana coming to Florida? If so, how would this affect Commercial Real Estate? Those are the questions many of us in the real estate industry are asking. CCIM Miami chapter had Miami Attorney Jeffrey Feiler at the member meeting to discuss these topics. If Amendment 2 is approved in the election this November, approval for medical marijuana may be coming to Florida.
According to Miami Attorney, Jeffrey Feiler, if marijuana is approved in Florida under the same regulations as the State of Colorado, local private landlords would benefit the most. Currently in Colorado, only property owners who are residents of the state are allowed to rent real estate to marijuana growers. This is done to make sure residents get the benefit for this new industry. In this case, national REIT’s will not be able to benefit from the demand of warehouse space.
A second advantage for landlords would be higher rents which could be around $15 - $20/Sq. Ft. NNN. This is more than double Miami’s current market rate for warehouses.
What’s the typical size of warehouses? According to Jeffrey Feiler, growing warehouses range in different sizes. Small warehouses are from 6,000 Sq. Ft. to 10,000 Sq. Ft. Larger warehouses go from 40,000 Sq. Ft. to 50,000 Sq. Ft. The properties must provide heavy electrical power due to the lights and equipment needed to grow marijuana - ideally, more than 1,000 AMPS. Additionally, the warehouses would be 24/7 operations and would need continuous electricity.
With the potential change, an important factor for landlords to consider is financing. If the property has a loan from a national bank, the landlord may not be permitted to lease the property to a medical marijuana user. This is due to federal regulations against drugs and money laundering.
If the November vote for medical marijuana is passed, Florida will become the first southern state to legalize marijuana.
For more information on upcoming laws in the possible legalization of marijuana, contact attorney Jeffrey Feiler at 305-670-7700.
For more information on warehouses in Miami contact us at 786-433-2383