Marijuana use in San Francisco is officially legal under US law. California has legalized the use of marijuana, and customers in San Francisco can buy, consume, and even cultivate the plant throughout the state.
Now, what does that mean for the property owners? With SFs legalization, here’s what retailers and property owners need to know.
What You Need to Know About Legal Marijuana in California
Introducing an article about the burgeoning of the cannabis industry can make an intrepid real estate reporter feel a bit lightheaded (and not because they’ve been partaking of the product in question).
Let’s skip the simple truth. Legal cannabis is big business. In 2020, legal cannabis sales reached $17.5 billion. That’s nearly 50% increase over 2019.
Some predictions say that by 2026, legal sales of recreational cannabis will hit $41 billion annually. And as more states legalize cannabis, they are experiencing a surge of interest and retail investment from distributors and growers. This is virtually unprecedented in modern retail.
Handling policy work, regulatory analysis and strategic planning for investors and entrepreneurs that are involved, or seeking to get involved, in the SF cannabis industry can be tough – especially if you don’t have dispensary estate.
If you’re interested in obtaining one, this is the time to contact one of our managing supervisors for commercial real estate.
Cannabis Real Estate With IPG
IPG team is keen to represent real estate operations in the upcoming cannabis business, and support entrepreneurs looking to ‘lock in’ real estate for their dispensaries.
Our tenant representation is focused on finding the best retail spaces in San Francisco. We are here to develop a tactical approach and help our clients navigate their unique situations in the retail market.
The law requires retailers to secure real estate for their dispensary in advance of applying for a sales license. IPG is particularly well-positioned to provide this guidance, because in addition to our real estate work in the space, we partner with a lot of tech and medical companies, and possess data centers to help us research the market thoroughly.
Time To Look For a Cannabis Dispensary Location in San Francisco
You’re definitely going to see a tightly controlled industry. It’s not going to be some local market or underdeveloped county/state.
You’re definitely going to see a tightly controlled industry.
Cannabis retailers will probably face many of the issues that other retailers commonly do not confront when seeking a location.
First of all, your cannabis dispensaries will probably be restricted with regard to their proximity to places of worship, schools, and existing medicinal cannabis dispensaries or prospective recreational competitors.
Retailers also likely won’t be permitted to display their goods in store windows, and the state will probably even demand frosting them over (at least up until a certain height).
In urban locations, such as SF City, proximity to public transportation and high-volume restaurants, museums, and other retailers is key.
IPG can help safeguard retailers that pick a location now, and help with the rules and regulations to later validate their selection. On the other hand, should the rules and regulations not allow the chosen site, we can just terminate the LOI and/or terminate the lease.
Securing a location for a cannabis business is fundamentally different than most other retail uses. The biggest takeaway is that a lot of your decision-making is going to be guided by policy and regulations because it’s such a tightly regulated industry.
Get in touch with IPG to better understand the nascent legal cannabis industry in San Francisco, and obtain clarity on some of the complicated real estate-related questions that prospective dispensary retailers are asking as they consider establishing a presence in the Californian market.