Legalized Marijuana in Alaska

How New Marijuana Laws Affect Alaska’s Commercial Real Estate Market

Commercial Brokers are anticipating a boom in retail and industrial real estate within the Anchorage bowl with the recent passing for legalization of marijuana. There is quite a buzz as potential shop owners, brokers, and marijuana clubs await the public hearing for zoning later this year.

Colorado faced this dilemma in 2013, when their laws were adapted for allowance of retail establishments to distribute marijuana to marijuana card holders. Colorado limited zoning of these establishment and facilities for growth in industrial areas of Denver. This both created an explosion of activity as well as created a huge limitation.

This is the single largest impact on industrial properties in colorado, with record low industrial vacancy rates of 3.1%.

Industrial zoning in Colorado encompasses more than Alaska’s market. Often in the greater Denver area it includes manufacturing, food distribution companies, warehouses for all stores in the areas, ect. Today the limited industrial zoned real estate and vacant land is going for a pretty penny as all of these entities compete with marijuana retailers.

Anchorage’s current industrial market is at a 98% occupancy level, class A, B, and C are full. Retail real estate is at a 97% occupancy level. If Alaska’s market resembles anything close to what Colorado’s market did after the adaptation of allowance of retail marijuana dealers, our market is going to get really interesting.

If Alaska market resembles is anything close to what happen in Colorado after the pass recreational marijuana things are going to get very interesting.

Legalized-Marijuana-in-AlaskaAside from the direct affect on the industrial market, Denver’s real estate as a whole increased. Following the retailer adaptation, the average home price increased by $40,000. As of December 2014, there was a surge of revenue for the state of Colorado via the issuance of 833 recreational licenses, of which 322 where for retailers; and 1,416 medical licenses, of which 505 where for medical marijuana dispensaries. The price-per-square-foot for industrial property increased from $3.34 to $4.43 per SF. Recent news says Colorados landlords are leasing to cannabis grow operations at nearly $20/per SF. That is more than four times the average rent for an industrial building in the city. Even the Springs felt a bump up, with their industrial property going for $12/per SF. Marijuana businesses are willingly agreeing to the substantially higher rate just to secure a place within state guidelines.

In 2014 the State of Colorado reported making $76 million from marijuana; this includes revenue taxes, licenses and fees from recreational and medical marijuana. Can you imagine the impact this would make on Alaska’s state debt? That is, assuming the same impact was made here. Alaska’s population throughout the state ranges over 760,000. Denver’s metro population alone is 649,000. There is a huge difference in the amount of people who may utilize the marijuana license options available in Alaska vs Denver. But, without a doubt Alaskans voted it in.

We are eagerly waiting the zoning hearing happening next month. Check back for updates on the states marijuana laws’ affects on Alaska’s Real Estate. Have questions? Give us a call at (907) 334-4645, Graham Commercial Real Estate Consultants, Inc.

How New Marijuana Laws Affect Alaska’s Commercial Real Estate Market

Commercial Brokers are anticipating a boom in retail and industrial real estate within the Anchorage bowl with the recent passing for legalization of marijuana. There is quite a buzz as potential shop owners, brokers, and marijuana clubs await the public hearing for zoning later this year.

Colorado faced this dilemma in 2013, when their laws were adapted for allowance of retail establishments to distribute marijuana to marijuana card holders. Colorado limited zoning of these establishment and facilities for growth in industrial areas of Denver. This both created an explosion of activity as well as created a huge limitation.

This is the single largest impact on industrial properties in colorado, with record low industrial vacancy rates of 3.1%.

Industrial zoning in Colorado encompasses more than Alaska’s market. Often in the greater Denver area it includes manufacturing, food distribution companies, warehouses for all stores in the areas, ect. Today the limited industrial zoned real estate and vacant land is going for a pretty penny as all of these entities compete with marijuana retailers.

 

Anchorage’s current industrial market is at a 98% occupancy level, class A, B, and C are full. Retail real estate is at a 97% occupancy level. If Alaska’s market resembles anything close to what Colorado’s market did after the adaptation of allowance of retail marijuana dealers, our market is going to get really interesting.

If Alaska market resembles is anything close to what happen in Colorado after the pass recreational marijuana things are going to get very interesting.

Aside from the direct affect on the industrial market, Denver’s real estate as a whole increased. Following the retailer adaptation, the average home price increased by $40,000. As of December 2014, there was a surge of revenue for the state of Colorado via the issuance of 833 recreational licenses, of which 322 where for retailers; and 1,416 medical licenses, of which 505 where for medical marijuana dispensaries. The price-per-square-foot for industrial property increased from $3.34 to $4.43 per SF. Recent news says Colorados landlords are leasing to cannabis grow operations at nearly $20/per SF. That is more than four times the average rent for an industrial building in the city. Even the Springs felt a bump up, with their industrial property going for $12/per SF. Marijuana businesses are willingly agreeing to the substantially higher rate just to secure a place within state guidelines.

In 2014 the State of Colorado reported making $76 million from marijuana; this includes revenue taxes, licenses and fees from recreational and medical marijuana. Can you imagine the impact this would make on Alaska’s state debt? That is, assuming the same impact was made here. Alaska’s population throughout the state ranges over 760,000. Denver’s metro population alone is 649,000. There is a huge difference in the amount of people who may utilize the marijuana license options available in Alaska vs Denver. But, without a doubt Alaskans voted it in.

We are eagerly waiting the zoning hearing happening next month. Check back for updates on the states marijuana laws’ affects on Alaska’s Real Estate. Have questions? Give us a call at (907) 334-4645, Graham Commercial Real Estate Consultants, Inc.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s