Warehouses are in vogue for a variety of reasons: They are big enough to hold thousands of plants, can accommodate the needed climate controls and are private and relatively easy to secure. Right now, millions of dollars are being spent to make old warehouses suitable for cannabis cultivation. Yet there are simmering concerns that a real estate bubble might be forming. “It’s a huge industry and only getting bigger.” Stone, a longtime real estate executive now focused on the pot business. “This is a new segment of the industrial real estate market that is being created in front of our eyes,” said George M.

Sales of legal cannabis reached $6.7 billion in the United States last year and are expected to top $20 billion by 2021, according to Acrview Market Research. The sharp rise in property prices follows the booming market for legal marijuana. A few months ago, a real estate investment trust focused on leasing out warehouse space to growers started trading on the New York Stock Exchange. In the city overall, there are five times as many retail pot shops as there are stand-alone Starbucks.

In some Denver neighborhoods, the average asking lease price for warehouse space jumped more than 50 percent from 2010 to 2015, according to an industry report. From Monterey, California, to Portland, Maine, the new industry is reshaping once-blighted neighborhoods and sending property values soaring.

“The landlord knew he was sitting on a gold mine,” said Zach Harvey, one of Ermont’s financial backers.Ĭommercial real estate developers say they have never seen a change so swift in so many places at once. In Quincy, Ermont is paying above market rate for the previously dilapidated 36,000-square-foot building. And because the marijuana business comes with added baggage, landlords and property owners are charging a premium for new tenants working in the cannabis business.

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