Is Cannabis Lighting Up CRE Rates?

Colorado, Washington and, more recently, Oregon, have benefitted from taxing the recently legalized cannabis industry. Additionally, crime rates are down. There are some concerns, however, that growing and processing cannabis takes up space; a lot of it.

Rents are also higher, with marijuana tenants normally paying two to three times average lease rates. According to John Erving with Eugene, OR-based Evans, Elder and Brown, the reason is that cannabis is still considered illegal by federal standards.

But there are anecdotal reports about rental rates increasing, due to marijuana demand. Though Erving said rents have increased across the board, some tenants believe that marijuana could be driving the lease rates up.