High demand pushes rents up for LA’s cannabis industry
Landlords willing to deal with legal uncertainty and stigma are profiting
Being the landlord to a marijuana operation used to be a small-time endeavor, better left unmentioned. Times have changed.
In Los Angeles, those businesses are part of the legal cannabis industry, and have been a boon for landlords who are willing to take them on, lingering stigma and all, the Los Angeles Times reported.
The local government in Lynwood implemented the lowest cannabis business taxes in the county.
Rents have doubled and tripled from the low $100s to more than $300 per square foot for warehouses because of demand from growers and investors scooping up square footage, a lawyer who works in the industry told the L.A. Times. And it will only get higher, experts predict.
“Prices [in the region] will skyrocket,” Aaron Herzberg said. “People are land-banking.”
Recently, a company that wants to use blockchain to legalize cannabis worldwide is creating a coworking space in Hollywood for small companies and freelancers working in the legal pot industry. Paragon is aptly calling its new space the Paragon Space, which will be located at 1459 Tamarind Avenue near Sunset Boulevard.
The marijuana industry still comes with risks.
The Trump administration has changed the federal government’s approach to the legal marijuana industry. The Justice Department under Attorney General Jeff Sessions discontinued a policy put in place under President Obama that largely deferred to the states on the matter. That’s kept away mainstream landlords, like real estate investment trusts, according to the Times.
[LA Times] — Dennis Lynch