21 July 2016

Here’s the introduction to the MJ Biz Piece… well worth a read

Prospective marijuana growers who lack the money to bankroll their own sites increasingly are turning to companies that specialize in leasing land to cannabis cultivators.

That has created a mini boom in the emerging real estate leasing business – and given cultivators a new avenue for launching their companies.

Executives with real estate firms that lease to marijuana growers say the market for their services is large and growing, fueled by increased demand for cannabis and the need for land to grow the plant.

Investors, meanwhile, are pouring millions of dollars into these businesses. Looking ahead, the expected growth of these companies is expected to transform cannabis cultivation, with mega grow sites becoming more the norm, some experts said.

“Cannabis is going to be a $20 billion industry in 2020. Someone is going to have to build millions of square feet of infrastructure, which is going to take billions of dollars to produce the product that will generate that forecasted revenue,” said Tim Keogh, CEO of Denver-based AmeriCann, which has properties in Colorado, Illinois and Massachusetts. “As of now, the infrastructure isn’t there to meet those numbers.”

The land leasing business has certain attractions, apart from being a part of the overall growing marijuana industry.

Leasing company executives don’t actually touch the plant – so they don’t carry any personal risk – and there is relatively limited competition because of the specialized skill set and the large amount of money needed to bankroll such an operation.

“In this industry, there’s plenty of room for people who have the skills that we bring to the table, and an opportunity for everybody to be successful because the growth within the industry is quite high,” said George Stone, CEO of Kalyx Development, a Manhattan real estate company that leases property to indoor cannabis growers and operates properties in Colorado, Washington and Oregon.

Cannabis Cultivation Leasing Companies Undergoing Growth Spurt