by Jodi Summerscalifornia bud

Next year, California is going to get legal marijuana, and both industrial and retail real estate sectors stand to benefit from pot’s legalization. Now the big project is for users and investors to find properties in legally acceptable locations.

“Marijuana legalization is a boost to industrial absorption in the states that legalize it, observes Ten-X Real Estate’s senior quantitative strategist Chris Muoio. “Growing at scale requires a lot of space with a consistent climate, which is a need that is perfectly met by large warehouse space.”

Growers are most interested in warehouses smaller than 80,000 square feet, according to the Wall Street Journal. In Southern California, between 8,000 square feet and 20,000 square feet is the sweet spot size for indoor marijuana farms. This size range is ideal for growing marijuana as well as packaging and storing it. Beyond the plant itself, the edibles business marijuana warehouseuses industrial space for cooking, packaging and distribution. In the marijuana business, we even know about industrial space that is being used for cash storage, as this business does not currently have access to the banking system.

Recreational use of marijuana was legalized in Colorado in 2012. Mark Bowen, vice president of the Denver office of DCT Industrial Trust investors, notes that the marijuana industry has driven up the cost of warehouse space by 60% or more and increased lease renewal rates by 25%.

Since California passed Prop 64 in the 2016 election cycle, marijuana friendly industrial real estate has seen an increase in value. One property owner recently got an offer of $1 million for a legal-to-grow 2.5-acre parcel in desert hot springs future grow siteDesert Hot Springs – a price of nearly 3x what they paid for the property in 2015. And, this is just the start. Recreational marijuana laws don’t even go into effect in 2018.

“If you have the right parcel with utilities in the right jurisdiction, your land will definitely appreciate as a result of Prop 64,” investors reveal.

Restrictions are making real estate prices skyrocket and finding any place to sell medical marijuana is hard, let alone one that is affordable. Properties for marijuana can go for more than double the market value.

pot store counterIt is estimated that California’s cannabis industry could grow to $6.5 billion by 2020, making California the largest market for legal marijuana in the world, by a long shot.

Expect legalization to also be a boost to the retail sector, which desperately needs destination-based product to get people coming back to the stores. Optimists would like to see marijuana shops proliferate like liquor stores. Pundits envision increased absorption in the retail sector, which will in turn lower vacancies and drive up rents. That’s only if the change the location laws so these shops can be closer to schools and parks.

The experts conclude that markets which are legalizing marijuana are providing their industrial and retail markets MJ-plants-1455x1940with an additional catalyst to drive absorption and fundamentals that should be fairly agnostic to economic cycles.

Before you get out your checkbook and start writing for joy, remember loans are hard to come by. One of the constraints still facing the marijuana industry is that while it is now legal at the state level, it’s still illegal at the federal level – and this has resulted in the financial industry being unwilling to loan for cannabis. This may change soon. After the last election cycle, more than after the states in the country have supported medicinal marijuana, so those rules may change soon. In the meantime, the marijuana business financing is still the wild, wild West. This has left the space struggling to find banking solutions and operating underground or highly in cash.

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About Jodi Summers

Jodi Summers
SoCal Investment Real Estate Group
Sotheby’s International Realty

Sotheby’s International Realty’s legacy dates back to 1744. Respected as one of the world’s oldest and largest fine art auctioneers, Sotheby’s has a longstanding tradition of bringing together buyers and sellers of fine property. Today, Sotheby’s International Realty boasts nearly 13,000 sales associates, located in more than 660 offices in 49 countries and territories. Broker Jodi Summers is the founder of the SoCal Investment Real Estate Group, a top producing team with Sotheby’s International Realty in the Los Angeles area.

With more than $140,000,000 in listed inventory, Jodi and the SoCal Investment Real Estate Group know finance, rules, regulations, procedures and methods. We are accurate, knowledgeable, timely and aware of how government shapes the cities of Southern California, including Santa Monica, Venice, Culver City, West Hollywood, Beverly Hills and Los Angeles.

A New York native, Jodi grew up working in the family business – marketing, Madison Avenue style. Childhood math quiz questions calculated demographic and psychographic percentages or analyzed the allocation of adverting dollars. Word games were for devising slogans.

“My marketing and communication skills have proven to be a true gift when it comes to promoting real estate,” observes Jodi. “And I am consistently able to get an exceptionally high price per square foot for my sellers.”

Discipline (Jodi holds a Black Belt in Tae Kwon Do), organization, motivation, excellent communication skills and knowing & satisfying the needs of her clients have been her essentials for running a successful business. A passion for investment real estate explains her emphasis in asset-yielding properties.

The City of Santa Monica chose Jodi to be part of the prestigious 9-member Civic Working Group to analyze and offer feedback on the future of the 10.5-acre Santa Monica Civic Auditorium site. Additionally, Jodi is a member of the National Association of Realtors, Beverly Hills + Greater West Side Association of Realtors, Action Apartment Association of Westside income property owners, the Santa Monica Conservancy historic preservation society, the Friends of Sunset Park community group, the Real Estate Investors Club L.A., the American Solar Energy Society, Sierra Club, California Parks Association and the Culver City Rock & Mineral Club. She is currently the Communications Chair for the Ocean Park Association in Santa Monica, and a partner in Save the Civic – a community group involved with the City in the adaptive reuse of the Santa Monica Civic Auditorium and adjacent area.

An honors graduate from the Walter Cronkite School of Journalism at Arizona State University, Jodi moved to California in the mid-’90s to achieve her goal of living by the beach with a hibiscus bush in her yard.

She has thrived as an entrepreneur in the entertainment, media and marketing industries. She has three books in publication with Allworth Press – The Interactive Music Handbook, Making and Marketing Music and Moving Up In the Music Business. Making and Marketing Music is in second edition. Check out her work on

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