By IvyLee Rosario  •  Commercial Property Executive

With 10 states plus Washington, D.C., legalizing cannabis for recreational use and medical marijuana legal in another 23 states, the marijuana industry is providing an opportunity for those in the commercial real estate to dip their toes into something new. According to the National Institute for Cannabis Investors, legal cannabis sales are projected to grow from $10.8 billion in 2019 to nearly $100 billion in the next five years.

Even at this early stage, the legal cannabis business appears to be exerting an impact on commercial real estate, According to a National Association of Realtors study, 34 percent of commercial members report an increased demand for warehouse space in states where medical marijuana is legal. Another 31 percent have seen an uptick in retail demand and another 18 percent report a similar increase in land demand.

“Cannabis seems to have the fastest growth projection of any major up-and-coming industry,” noted Charles Jack IV, senior managing director, Integra Realty Resources. “More states are likely to approve not only medical, but (adult recreational use).”Adult recreational use generates 80 percent Nevada’s marijuana-related revenues, he notes. But unique nature of the legal cannabis business dictates that potential participants should do their homework thoroughly before making the decision to enter the business.

High Hurdles

One of the most prominent challenges of the cannabis space within commercial real estate is the regulatory side of the business. Typically, cannabis production and dispensary facilities must be located at least 100 feet from residential neighborhoods and 1,000 feet from places frequented by children or minors. This includes city parks, schools, churches, childcare centers, playgrounds, libraries and residential care facilities.

For investors looking to enter this specialized market, location is a crucial factor in success, as it is for any asset category. “Where these buildings and properties are allowed to be operated is either like finding a needle in a haystack, or it’s open season and the market is too saturated,” said Bryan McLaren, chairman & CEO, Zoned Properties.

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Although the life sciences industry was headed for growth before the pandemic kicked off, the sector is currently experiencing a boom, fueled by the race to find a vaccine. As COVID-19 is changing all aspects of commercial development, one of the emerging trends represents the conversion of more traditional commercial office buildings to those that support labs and research.

Multinational architecture firm NBBJ strives to create a new workplace experience in these repurposed facilities. The company—known for designing Amazon’s HQ1 and HQ2 and hospitals for health-care systems such as Mass General—oversaw the redevelopment of an industrial asset on Cambridge’s Unity Campus into an innovative office space, known as The Works. NBBJ is currently working on the new home for the Departments of Experimental Psychology and Biology, a new research building known as the biggest project in Oxford University’s history.

Principal Jonathan Wall, based in San Francisco, and Mark Bryan, a leader within NBBJ’s science lab practice based in London, discuss how COVID-19 prompts developers to reimagine office buildings into lab and science space, a trend supporting the preservation and further expansion of the niche sector.

Tell us about the process of repositioning commercial buildings into labs and research assets. Was this generated by the current health crisis?

Wall: The current crisis demonstrates the importance of real estate that can adapt to a wide range of uses. This flexibility ensures a proper return on investment and the ability to attract new tenant types. At the same time, we see increased investment in the science sector, especially related to COVID-19 vaccinations and treatment.

With the uncertainty that the pandemic has cast upon some development projects—including those that attract industries that are especially vulnerable such as in-person retail—developers are exploring more flexible sites and buildings to accommodate the burgeoning life sciences and lab sector and tech companies. This is a relatively new endeavor as most buildings are designed to accommodate one of these tenant types, but not both.

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By Javier Hasse • Contributor, Forbes Magazine –

As the cannabis industry grows, people and companies from other trades are rapidly migrating toward it. From Fortune 500 execs to former politicians, and from banks to beer makers, smart money seems to want a piece of the green rush.

However, it is not usual to hear that a cannabis-focused company is venturing outside of the cannabis arena. Yet, this is what CannaRegs, co-founded by Amanda Ostrowitz, former regulator at the Federal Reserve Bank of Kansas City, is about to do.

As Ostrowitz revealed exclusively today, Regs Technology – or RegsTech for short, the parent company to CannaRegs, which operates a data platform that provides comprehensive cannabis-related legal data, including rules and regulations from municipal, county, state and federal sources, just closed a $2 million funding round. Money will be used to expand the company’s services and features, as well as to take a leap outside the cannabis industry. The raise will be announced later on Tuesday.

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