Is medical marijuana a magic pill for real estate?
Proponents of medical marijuana claim health benefits that range from reduction in pain to a cure for cancer, but is the legalization of medical marijuana likely to have such a beneficial impact on the real estate industry?
Some arguments for legalization claim that the industry will mean an obvious growth in commercial and agricultural real estate industries.
Pennsylvania’s Medical Marijuana Act, which was signed into law last year, creates a network of dispensaries, growing operations, processing operations and research facilities to cultivate and sell medical-grade marijuana for the treatment of serious medical conditions. This surely inspired visions of commercial storefronts on every corner and sprawling green farmlands. However, the law is likely to have little impact on the commercial, industrial and agricultural real estate markets because the production of medical marijuana is limited and highly-regulated.
The act only allows for 25 permits to grow and process marijuana and eight permits for research. These permits are split among six regions of the state, and are awarded based on criteria such as population, the number of patients with serious medical conditions, access to public transportation and a recognized need for economic development. The act allows for 198 dispensary locations as well which, spread out over 67 counties, equates to roughly three stores per county. Both growing locations and dispensary locations are subject to strict regulations from the Department of Health about the premises which means that not just any vacant greenhouse or commercial storefront will do.
The residential real estate market might actually be the beneficiary of medical marijuana. The one thing that is certain to result from this new industry is jobs. Workers will be needed at all phases of the process, which means that more people could have steady employment and income, which may then be invested in homeownership.