Is Colorado “High” on Marijuana?
The medical marijuana and now the legalization of marijuana in Colorado is having profound effects on Colorado real estate. Everyone is scrambling to become the largest grower, seller, etc…
Under CO law, most prominent regulatory items is the location of a grow operation. Grow operations are prohibited from being near any public or parochial school or the principal campus of any college, university or seminary, as well as child care center or drug treatment center. As a result of this regulation, along with various requirements by the respective cities regarding marijuana facilities, the vast majority of marijuana facilities have located in industrial areas. Not only do industrial areas meet many of the location requirements, but also many have heavy power and ample water, which is also required by marijuana growers. Industrial facilities have become the preferred location for this new industry.
As a result, industrial building has become the hot commodity in the marijuana industry. For example I recently looked at a building on Colorado boulevard which is becoming a hot area for grow operations. In this particular scenario the building was constructed in the 1950s and had low ceilings (12 feet which is extremely low for the vast majority of industrial uses today). The current owner had been trying to rent the building for the past 3 years with no success. Based on their asking rental rate, the building was worth close to 400,000. A grow operation had put an offer of almost 750,000 on this building. It is amazing the false demand the marijuana industry is creating in the industrial sector. See the following article in the Colorado Real Estate Journal which goes into detail of the impact of marijuana on Colorado real estate prices.
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