You must be high, eh?
Canada’s pot industry will need more than 8 million square feet of industrial real estate by 2020, Bloomberg News reported. That would be about the size of Amazon’s Seattle headquarters, which houses about 40,000 workers across multiple buildings.
The 8 million-square-foot figure includes distribution and logistics centers, and would be more than five times the current level, according to JLL.
Canada is slated to make recreational marijuana legal in August or September.
The country’s $23 billion weed industry will put more pressure on the industrial real estate market, which had a vacancy rate of 3.9 percent at the end of 2017. That was the lowest figure since 2001.
Rents are up 15 percent in Vancouver and 7.3 percent in Toronto from 2016, according to Cushman & Wakefield.
“Industrial is as hot as anything you can imagine,” said Altus Group CEO Robert Courteau. Amazon and the pot industry, he said, are “another level of aggravation on unavailable assets.”
For a glimpse of how legalization impacts industrial real estate, Canadians can look south of the 49th parallel.
In Portland, O.R., cannabis companies paid a premium of $12 to $18 per square foot for industrial space in 2016 compared to market rates of roughly $5.
In New York, a lack of available real estate could be hampering the state’s marijuana industry. [Bloomberg] – Rich Bockmann