New York’s marijuana real estate market: A Q&A with Kristin Jordan.
New York’s Cannabis Control Board will award a limited number of licenses for the state’s adult-use marijuana market, and for those vying to be among the first picked, where and how they choose to build their business will play a key role in the board’s decision.
But regulations aren’t yet published, so it’s unknown exactly how location and real estate will be evaluated in a successful application. There are experts, though, who have worked in other state legal markets, or spent time studying those regulations, with valuable insights for hopeful applicants.
“We need to look at real estate as a key component to the success of the industry,” said Kristin Jordan, the founder and CEO of Park Jordan, a cannabis-focused real estate brokerage and advisory services firm.
Jordan, previously the director of real estate at Acreage Holdings, said the key for applicants “is to understand where you would like to be, and then understand those communities.” That includes identifying stakeholders, she said, and knowing how the municipality stands regarding the law’s opt-out provision.
Jordan will go in-depth on the topic of real estate and location during New York Cannabis Insider’s half-day conference on Thursday, Oct. 28. (Tickets are available here).
What follows is a Q&A with her in advance of the event. It is edited for length and clarity.
NYCI: Is it your understanding that priority will be given to applicants who have shown that they have secured actual space, or that they tentatively could access space?
JORDAN: That’s a good question. I think what we can expect is similar to other states in that there has to be a modicum of a relationship to the property in question. And so whether or not that is simply a letter of intent versus a full-on lease is yet to be seen in the regulations. But my expectation is that there will simply just need to be a relationship with the property.
However, this program includes New York City, where there’s a finite number of properties that are applicable. There’s a finite number of landlords that understand and are willing to have a cannabis tenant despite federal prohibition. And so I think what’s going to happen is we’re going to see folks actually securing space, under a lease or purchase in many instances, to safeguard against losing those locations.
What we’re trying to do at Park Jordan is to be a conduit and and a source of education for landlords who don’t understand this process and may be reluctant to lease to a cannabis tenant because they don’t fully understand the regulatory process — what federal prohibition means to a landlord in New York, etc. That education piece I think is incumbent on folks like us who have worked in other states and who understand this process a little bit better and can provide assurances in a highly regulated industry.
NYCI: Do you foresee a cannabis migration north out of NYC?
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JORDAN: 100%.
Listen, there’s eight and a half million people in New York City and it’s an exciting area to have a retail operation and on-site consumption. However, there are 12 million people outside of New York City where the cost of capital to build out a location really behooves folks to take a second look at some densely populated areas.
The Capital Region is really exciting. Buffalo is the second largest city in New York. Then there’s Syracuse. There are huge swaths in the Finger Lakes area and in the Southern Tier area.
Also, it’s my understanding that you don’t have as much legacy activity there competing with the proposed adult-use market.
NYCI: What can people who don’t have access to a ton of capital be doing now to to prepare?
JORDAN: That’s a question that everybody keeps asking because the bill has lofty goals to provide low-interest and no-interest loans, incubator services and the like for folks who qualify for social equity licensure. And so the hope and the goal is that those resources will be available day one.
However, we’ve seen in other states where this takes some time to ramp up, and I know that Albany has been thinking about this for a number of years. So I’m hopeful — because of the regulators that we have in place — that they are thinking about this for day one and these resources will be available.
However, for the lay person who is trying to get things off the ground now, I suggest figuring out what resources are available today and starting to vet those resources.
These applications will be highly competitive and there are consultants and law firms aplenty. People need to figure out which teams might make the most sense, which have your best interests at heart, and also who has the experience. There’s a lot of folks from out of state who may not have that expertise necessary to understand how to navigate within the state.
New York Cannabis Insider is hosting a can’t-miss conference on Oct. 28 with a focus on market preparedness. Head here to see the lineup and purchase tickets.