By Liz Brumer  •  Million Acres (A Motley Fool Service)

In August 2020, Congress established a new opportunity zone for real estate investors and business owners with the designation of Hemp Opportunity Zones. As with other opportunity zones, these come with significant, long-term tax advantages to the investor.

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.

Continue reading at Commercial Property Executive

A commercial real estate investment can provide many benefits including income, capital gains, favorable tax treatment, portfolio diversification, and inflation protection. Most of these benefits are fairly straightforward, but the last one—a hedge against inflation—is commonly misunderstood and often overlooked. In order to understand what it is and why it can be powerful, it is first important to understand the concept of inflation itself.

First, What is Inflation?

Inflation is the general rise in the price of goods and services over time, resulting in a sustained drop in the purchasing power of money. In other words, a dollar today is worth more than a dollar in the future due to its loss of purchasing power.  

With any type of investment, inflation is an important concept because returns need to be measured both in absolute terms and in relative terms. For example, an individual could allocate money to an investment that pays an interest rate of 3% annually (the absolute return), but if inflation causes consumer prices to rise by 3% in that same year, the relative return on the investment is 0% because the purchasing power of that capital remains unchanged. In that way, it is important for an investment to earn a return, but it is more important that the return outpaces inflation to ensure that purchasing power increases over time.

While inflation can seem scary, many experts and economists actually consider a small amount of it to be a sign of a healthy economy. This is because it encourages consumers to spend money today rather than save it and watch its purchasing power erode over time. In fact, the United States Federal Reserve (as well as other central banks around the world) monitors inflation closely using the “Consumer Price Index” or “CPI” to ensure that it stays within a desired range of 2% – 3% annually. If the economy heats up with prices rising too quickly, the Fed will raise interest rates to slow it down. Conversely, if economic growth is contracting, the Fed will  decrease interest rates to encourage economic activity.

Given the known effects of inflation, it is only natural for investors to ask which asset classes or investment types perform well in an inflationary environment. In other words, which investments can best serve as an inflation hedge?

Continue reading at First National Realty Partners

• Cannabis-related firms again face hurdles in qualifying for financial relief under the newly enacted $1.9 trillion coronavirus stimulus package, but the door has opened wider for hard-hit companies, especially small and economically disadvantaged businesses.

  The American Rescue Plan Act of 2021 (ARPA) includes three programs worth exploring, marijuana industry experts said.

  Two offer billions of dollars in loans and grants, while another provides tax credits:

  • State Small Business Credit Initiative: More than $10 billion is being funneled to states to support small businesses, economically disadvantaged businesses and micro-businesses. Some experts believe state rather than federal rules should apply, potentially opening up funds for marijuana businesses operating in state-legal markets.
  • Employee Retention Credit: Requirements for these payroll tax credits have been relaxed some, and credits now could be in play for cannabis-related firms that have experienced a year-to-year drop in receipts of 20% or more (the previous standard was 50%).
  • Payroll protection loans and grants: The same strict requirements persist from the two previous economic stimulus rounds, but experts note that banks, which issue the loans and grants, ultimately determine whether a business qualifies.

  Overall, though, it’s tough for cannabis-related businesses to tap the funds, especially those that are plant-touching.

  “Once again, the cannabis industry has (largely) been left out of coronavirus relief, and likely that will only change once marijuana is legal federally,” said Josh Kappel, a founding partner of Denver-based law firm Vicente Sederberg.

  Potential help through states

  Steve Schain, a senior attorney in New Jersey and Pennsylvania for the Hoban Law Group, views the situation more bullishly.

  He sees the State Small Business Credit Initiative as a funding possibility for both ancillary and plant-touching businesses. The initiative provides the following funding to state-run, small business-financing programs, Schain said:

  • $10 billion to support small businesses recovering from pandemic impacts.
  • $2.5 billion to support small businesses majority-owned by social and economically disadvantaged individuals.
  • $500 million to “very small businesses” with fewer than 10 employees.

  Some of those funds “could be in play for marijuana companies,” Schain said.

  To Continue Reading go to: Marijuana Business Daily

HELENA, Mont. — Bill Stocker could be considered the archetype of a conservative voter: He’s a retired Marine and former police officer who voted for President Donald Trump. But he’s also among the majority of South Dakota voters who broadly legalized marijuana this month.

Stocker, 61, said enforcing marijuana laws gets in the way of pursuing other drug crimes and called warnings about the ills of marijuana “a bunch of baloney” that even people in a Republican stronghold like South Dakota no longer believe.

South Dakota’s values of “personal responsibility and freedom” won out, said Stocker, who lives in Sioux Falls.

The 2020 election helped prove how broadly accepted marijuana has become throughout the United States, with measures to legalize recreational pot also breezing to victory in progressive New Jersey, moderate Arizona and conservative Montana. Fifteen states have now broadly legalized it, while 36 states allow medical marijuana.

Voters in Mississippi overwhelmingly approved medical marijuana this month, giving the drug another foothold in the South.

A Gallup Poll released Nov. 9 indicated that 68% of Americans favor legalizing marijuana — double the approval rate in 2003. That wide margin was evident in the election, with marijuana measures passing with strong bipartisan support.

In South Dakota and Montana — where Republicans swept to victory in the key races — recreational marijuana passed with at least 16 percentage points more support than Democratic President-elect Joe Biden received. South Dakota also approved medical pot, which outpolled Biden by 34 percentage points.

“We’ve waged a war against this plant for a century and by any reasonable metric, that war has been an abject failure,” said Matthew Schweich, deputy director of the Marijuana Policy Project, which favors legalization. “All it’s done is incarcerate millions of Americans, it has perpetuated racism in this country, and perhaps the worst injustice of all is that it’s deprived us of medical marijuana research.”

Marijuana is still illegal at the federal level, hurting veterans who can’t be prescribed medical pot at Veterans Affairs clinics, he said.

They “come home with chronic pain and we’re pushing them to opioids,” Schweich said. “That’s crazy. That’s unpatriotic and it’s a disgrace.”

Continue reading at ABCNews.com

Between the presidential election, governor races, and down-ballot contests, this year’s election features a lot of important choices. Among those, voters in five states will have a chance to legalize marijuana for recreational or medical uses.

In Arizona, Montana, New Jersey, and South Dakota, voters could legalize marijuana for recreational purposes. In Mississippi and South Dakota (in a ballot initiative separate from the full legalization measure), voters could also legalize medical marijuana.

If all these measures are approved, the United States would go from having 11 states in which marijuana is legal to 15. Counting by population, that would mean more than one-third of Americans would live in a state with legalized marijuana, up from more than a quarter today.

The ballot initiatives represent a massive shift in drug policy. A decade ago, zero states had legalized marijuana. Then, in 2012, Colorado and Washington became the first two states to legalize cannabis for recreational use and sales — and many others followed.

Despite the success of state measures, marijuana remains illegal at the federal level. But since the Obama administration, the federal government has generally taken a hands-off approach to states’ marijuana initiatives. There are still hurdles — banking is a challenge for marijuana businesses under federal prohibition — but for the most part the federal government has not interfered in states’ laws since 2013.

That policy may reflect a change in public opinion: As it stands, public opinion surveys show that even a majority of Republicans, who tend to take more anti-marijuana views than their Democratic and independent peers, support legalization.

In that context, legalization advocates are optimistic about their prospects this year, even in historically red states like Arizona, Montana, and South Dakota. If all these measures are successful, the US will have taken a major step forward both in undoing its drug war, and in undoing some of the damage it has done to communities of color.

Continue at MSN NEWS

With headlines like “Sublease Space Approaching Record Levels” showing up almost daily in the news feeds of those in the commercial real estate industry, it would be easy to conclude that the office market is on the verge of collapse.

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.

Continue Reading at Commercial Property Executive

During the last six months, the size of Pennsylvania’s medical marijuana program has surged due to the anxiety-producing effects of COVID-19 and some favorable changes to regulation.

The number of patient visits at cannabis dispensaries has risen by more than 70 percent — rising from 70,000 a week in February to 120,000 each week in August.

Retail sales also have exploded. Since February, dispensaries have sold as much marijuana as they had during the previous two years combined, according to statistics released last week by the state Department of Health, which governs the cannabis program.

Patients bought about $385 million in legal marijuana products from the state’s 89 cannabis dispensaries during the period, according to the state Office of Medical Marijuana. Until February, total retail sales since the inception of the highly regulated industry two years ago in the Keystone State had totaled only about $400 million. There are at least 27 dispensaries now operating in the five-county region.

“The program is doing really well,” said Chris Woods, CEO of Terrapin Care Station, a cannabis grower and processor upstate in Clinton County. “It’s hard not to draw a correlation with COVID-19. In unsettled times, cannabis is a medicine that seems to help people cope with anxiety.”

Anxiety remains one of the most cited reasons for getting a state medical marijuana card. It comes in second only to chronic pain. Post traumatic stress disorder is a distant third.

Why has marijuana suddenly taken off?

It is chiefly attributable to temporary changes to the regulations implemented by the Wolf administration. Marijuana dispensaries were among the first businesses deemed “essential” by Gov. Tom Wolf. But Wolf also streamlined access to medical marijuana in ways that made it safer to join the program.

Continue Reading at MSN.com