As drug laws loosen, many are asking what relaxed rules on marijuana mean for real estate. What challenges and opportunities does it bring?
Legal Weed
Since 2008 and the financial crises more and more states have legalized or decriminalized marijuana. Some countries around the world have even legalized a wider variety of drugs, including cocaine. Many have become highly popular destinations, with booming economies, and tax revenues. While Coca-Cola may remain the only US company to be able to legally import and process coca leaves for a while, many new companies are launching to grow, test, process, distribute and sell marijuana. Some states have given the greenlight for both medical and recreational use. Florida currently only permits medical use, but that could change in the future.
You can check out a state by state list of marijuana laws here.
The Benefits of Legalization
Aside from providing medical marijuana prescription holders get their treatment, legalization may have other benefits. Especially for local economies and real estate.
There has reportedly been a big population boom and surge in demand for real estate in areas which were early to the marijuana party. People want to live there. Sellers need retail space. Producers need grow space and distribution facilities.
This could help offset property taxes for neighbors. According to data from PropLogix, Colorado properties in legal weed neighborhoods appreciated an average of $33,000 more over the same period compared to those in banned areas.
One of the biggest issues facing existing companies in the business are reportedly getting ahead of the demand and growing the supply. If, expansion is coming in Florida smart investors may find this niche as one of the fastest growing property types.
Even in directly, it is also being reported that because banks don’t want to touch marijuana money (as it still isn’t legal on a federal level), many businesses are choosing to invest their cash into real estate. That can be residential or commercial property nationwide.
The Challenges
No one wants to attract the attention of handling marijuana money yet. It’s a huge liability. That means a lot of cold hard cash changing hands. As well as making the marijuana industry one of the ripest for cryptocurrencies.
A lot has to go into real estate. Although most title companies don’t want to manage escrow for these transactions, the forward thinking ones are still happy to facilitate the actual legal transaction, exchange of deed, and providing title insurance. These are very important factors and services no matter how much cash you have.
For many this trend offers a massive opportunity to invest in Florida real estate for great profits. Though finding a pot friendly title insurance company is going to be key to long term success and profitability.
