The National Association of REALTORS® (NAR) recently released survey results, “Marijuana and Real Estate: A Budding Issue,” finding that there has been an increase in demand for warehouses, land and store fronts used for marijuana production.
According to the report, more than one-third of respondents in states where marijuana is legal said the marijuana industry is contributing to the market’s tight inventory.
“The dynamics of marijuana have been far-reaching over the past year, which is evident when you see how it has impacted real estate,” said Jessica Lautz, vice president of Demographics and Behavioral Insights for NAR. “As the marijuana laws continue to evolve, REALTORS® have witnessed increased demand for commercial properties to store, grow and sell marijuana.”
There’s also been growth in purchasing over leasing within the commercial sector, according to 29% of surveyed commercial real estate professionals. This could be a workaround to avoid landlord addendums, according to NAR, which can often be burdensome due to added restrictions regarding the growing of marijuana plants.
In states where recreational marijuana is legal, respondents often answered that homeowner associations regularly had some policies or restrictions in place relating to smoking and growing marijuana in common areas or exposed areas. Almost half of homeowner associations were against smoking in common areas, and nearly two-fifths did not allow growing in mutual open areas, such as a private yard without fences.
“We saw that a number of property owners at some point in the past had difficulty leasing their property after a previous tenant consumed marijuana there over an extended period,” said Lautz. “To avoid repeats of those issues, landlords have implemented various guidelines that place numerous restrictions on the use of marijuana.”
Lautz added that property owners who have imposed these rules typically live in, or own property in, states where marijuana has been legal the longest.
“As the marijuana industry evolves, both commercial and residential landlords are balancing efforts to profit from the progressions, while also ensuring that their property remains desirable and at a high value,” Lautz continued.
For more information, please visit www.nar.realtor.