3 Ways Cannabis Legalization Impacts Real Estate Market
August 1st, 2014
Policy, Top News
Cannabis legalization efforts have drawn widespread support throughout the United States, with 23 U.S. states adopting medical marijuana laws and two U.S. states adopting recreational marijuana laws. While many advocates and oppositionists argue over issues like safety and taxation, there are many other important considerations associated with legalization, such the impact on other industries.
#1. Residential Property Damage
Colorado’s legalization of recreational marijuana means that anyone can now grow up to six marijuana plants in their personal residence. While indoor growing may sound benign, purchasing a home that was used to grow marijuana can be problematic for many homebuyers. Even six marijuana plants can consume a lot of energy and water, which can create some key problems to avoid.
According to Colorado Inspection Services, grow house damages may include things like unsafe wiring, oversized fusing, damaged fixtures, holes for ventilation, wood rot, rusted hallow columns, rusted appliances, mold from venting to interior spaces, and deterioration of chimney mortar from venting to the fireplace. These issues are caused largely from unsafe modifications needed to meet growing requirements.
#2. Legal Issues with Federal Housing
States like Colorado may have legalized recreational marijuana, but the drug is still classified as a Schedule I Controlled Substance under federal law. As a result, the consumption of marijuana remains illegal within properties build or operated with federal funds or insured by HUD, despite state legalization. These laws affect nearly 300 federally subsidized projects across the state of Colorado alone.
According to ColoradoRealtors, these policies could change over the coming years as the Obama Administration has been discussing new policies that will address public housing rules regarding the use of marijuana. When these policies will come into play remains to be seen and many experts predict that any liberalization could come at a steep political cost for Republicans that remain largely opposed.
#3. Rising Commercial Real Estate Prices
The use of commercial real estate for the cultivation and sale of marijuana will likely raise commercial real estate prices in states where the drug has been legalized. According to a recent Bloomberg piece, many warehouse owners in Colorado have had no trouble leasing to tenants seeking to grow indoor marijuana. These are also largely all-cash deals given that the industry has no access to formal banking yet.
In some cases, marijuana growers are paying upwards of $20 per square foot to lease Denver warehouses, compared to the average rent for an industrial building of just $4.43 per square foot. These dynamics are creating upward pressure on pricing for many non-marijuana firms, which could end up hurting their profitability or even ability to survive within the market in some cases.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.