Cannabis Real Estate Opportunities

My partner and I have specialized for the past several years in selling cannabis dispensaries.?Over the past two years, we have sold twenty-nine cannabis dispensaries, both medical and recreational.?We have successfully sold cannabis properties across ten different brands and in a total of four states.

When we first started marketing cannabis dispensaries, most investors were unfamiliar with the sector and had many questions.?In fact, some of the early buyers of the dispensaries we marketed were retired professional athletes as they had personal experience with the product.?Due to the lack of market knowledge by many real estate investors, those first few properties traded at cap rates in the range of approximately 7-7.5%.

We have diligently worked these past few years to better educate investors, brokers, and lenders about the many attributes of cannabis real estate.?As we have been able to get more investors comfortable with the sector, the buyer pool has evolved significantly.?In fact, the buyer pool for cannabis dispensaries is no longer very dissimilar from that of more traditional net lease assets.?Many buyers are in 1031 Exchanges and most of the buyers no longer question the viability of the cannabis brands or the sector.

As the depth of the buyer pool has grown, we have been able to successfully obtain more aggressive cap rates on behalf of our sellers.?Most of the dispensaries we have sold in 2022 have traded at cap rates of approximately 6.0% or lower.?This cap rate compression has been achieved although many of the locations being sold are not yet open for business.?Many of these sales were accomplished via pre-sale with the property closing taking place before the tenant has even commenced their remodel of the store.

We have been very successful at positively impacting the cap rates achieved by our clients for dispensaries being sold in Florida as well as several other states.?Now, we have begun marketing dispensaries for some fantastic brands operating in the States of New Mexico and Illinois.?Several of these operators like Schwazze and Curaleaf are publicly traded companies with very strong financials.

These markets have not yet had the velocity of cannabis real estate sales as has taken place over the past few years in Florida.?As a result, asking cap rates in these markets are currently higher than that for cannabis real estate in Florida.?Many investors believe this presents a great opportunity for investors interested in joining the Green Wave that is cannabis real estate.?Our thesis is that by purchasing cannabis dispensaries in more virgin markets like New Mexico or Illinois, an investor can currently achieve a higher return.?As cannabis real estate sales begin to gain momentum in these markets, cap rates should begin to compress, much like they did over the past few years in Florida.

If you are interested in learning more about investing in cannabis real estate, contact me directly as our team is the leader of the pack when it comes to selling cannabis dispensaries.

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