The marijuana industry in Denver is spurring one unlikely sector: real estate. Colorado’s cannabis industry occupies at least 3.7 million square feet of industrial space in Denver, a recent study discovered, the Denver Post reported Tuesday.
Marijuana has essentially “kick-started the recovery of the industrial market in Denver,” leading to nearly record-high rents and low vacancy rates, according to Jessica Ostermick, director of research and analysis for CBRE in Denver, the firm that conducted the study. From 2009 to 2014, marijuana cultivation accounted for more than a third of all industrial space leased in Denver, and one in every 11 industrial buildings in central Denver reportedly was full of marijuana.
The majority of commercial cultivators have been pushed to industrial areas because grows are not allowed within 500 feet of residential areas and many light-industrial areas are too close to homes, the Denver Post quoted a city spokeswoman as saying. Additionally, many property owners have not considered leasing to marijuana growers because of loan constraints and conflict with the federal law. If a marijuana tenant does find a landlord, the analysis found it often pays a higher rent, often three to four times more than the average for a mainstream business.
1 in 11 industrial buildings in central Denver now being used to grow marijuana, report finds - https://t.co/PBJZEgsmtd
— 7NEWS Denver Channel (@DenverChannel) October 20, 2015
"It's a new and disruptive industry," said Jason Thomas, principal of Avalon Realty Advisors, a firm that specializes in real estate for marijuana businesses, the Denver Post reported. "One that's making a huge impact, some positive, some negative, to mainstream businesses.”
Denver’s booming marijuana industry reportedly also is being blamed for pricing residents out of the city, Newser reported. Housing prices in Denver have increased 17 percent.
“I do believe that there has been a huge amount of individuals who have moved out here specifically for the marijuana industry, and it has affected the housing market,” said J.P. Speers, a real estate broker at Berkshire Hathaway Home Services, who said he believes legal marijuana has pushed the housing market up, the New Republic reported.