Medical Marijuana Saves Colorado Landlords
An unintended beneficiary of Colorado’s new medical marijuana laws are Colorado landlords. Cities have regulated the new industry using restrictive zoning regulations. Many of the properties that qualify as Marijuana grow and sales operations are the same properties that owners were unable to rent.
The Colorado real estate market has been in the dumper for years. Low interest rates have been little help for commercial landlords. If business can’t make a run of it, business owners can’t pay rent. Moving up the food chain, when business owners can't pay rent, landlords can't pay the banks, and the banks have to foreclose.
On July 1st, all that changed for landlords, at least for a few days. It was on “Green Tuesday” that a one-year moratorium on new licenses went into effect under HB 1284. Medical marijuana clinic owners who could not show rights to possession of a suitable location were locked out of the market for the next year.
“It was insanity,” said Gino Rodriguez, a Denver real estate broker who specializes in leasing to medical marijuana clinics. “The line to apply for licenses was around the block, and landlords could name their price! If one client didn’t take the space at five times the rent there were two more tenants waiting in line!”
The State of Colorado wised up to the potential of medical marijuana, as well. According to the Cannabis Therapy Institute, the new licensing fees range from $7,500 to $18,000. It was an unhappy surprise for medical marijuana clinic owners just before July 4.
If medical marijuana investors make a lot of money from their investments, and they could, they will have earned it. Since medical marijuana is an untested commodity in court, investors in the medical marijuana business have placed their fortunes at risk. Meanwhile, landlords and the State of Colorado are laughing all the way to the bank.