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The Truth About Investing in Cannabis Commercial Real Estate in Florida

Investing in commercial real estate leased to cannabis dispensaries can be an exciting investment option that many real estate investors have been overlooking. Despite the pitfalls faced in the early years during the legalization of cannabis in Florida, the industry is flourishing. According to the Leafly Jobs 2021 report, Florida is the 3rd largest cannabis seller in the U.S., leading job creation with a total of more than 31,000, equating to $1.2 billion in sales. 

“It’s a billion-dollar industry now,” Barry Wolfe says (pictured), Senior Managing Director based in Marcus & Millichap’s Fort Lauderdale office. “Medical marijuana dispensaries are professional, high-end establishments, with marketing tantamount to an Apple store. They are legit, publicly traded companies [mostly on the Canadian stock exchange], and it’s a great market to be in right now.” 

After having a successful practice as a commercial real estate attorney, Wolfe joined the Marcus & Millichap firm in 2001. In that time frame, he and Alan Lipsky, Senior Vice President Investments, have closed on the sale of over 665 individual properties across 41 states with a volume exceeding $1.95 billion.  

In the last 14 months, Wolfe and Lipsky have exclusively brought to market and closed deals on 14 cannabis dispensaries in four different states, including the major industry-leading companies Trulieve Cannabis Corp., Curaleaf, Sunnyside, and Surterra Wellness. They are also currently marketing multiple dispensaries with several others under contract and letter of intent. 

Now that a new study has found that compounds in cannabis can prevent the virus that causes Covid-19 from entering cells and causing infection, the interest has increased sales and further establishes medical dispensaries as essential industries. What are the significant differentiators and hurdles faced by investors in the market? 

If you are considering the move into cannabis commercial real estate, here are a few strategies to consider:  

  • Avoid financing challenges by favoring all-cash buyers 

 

Perhaps the most difficult part of closing a cannabis dispensary deal is banking challenges. Cannabis is not federally legal in the United States and generally requires all cash or low leverage buyers. The buyer pool is deep and is favorable to 1031 exchangers.  

  • Understand zoning types for properties coming to market 

 

Municipalities typically have strict zoning rules, and it is important to be aware of local land use and regulations, as cannabis dispensaries can only be permitted in certain locations.  

  • Identify location, quality areas, traffic count and strong tenants 

 

As with any real estate venture – tenant quality is always important. Accessibility, proximity to roadways, visibility, and future developments in the area are all critical factors as they are with most any retail real estate investment. 

  • Get the best deal by working with an expert 

 

The cannabis dispensary market is a unique and expanding subsector of real estate investing. For this reason, it is important to work with an expert who is well-versed in the market and can assist in evaluating the best strategy for you. If you are interested in learning more about investing in cannabis real estate, contact the market leaders—Barry Wolfe and Alan Lipsky.

Check out the Wolfe-Lipsky Group’s Current Exclusive Inventory

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Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.