It’s time to address the big, green elephant in the room: cannabis.
The date for the legalization of recreational cannabis is quickly approaching and already, its effect on the demand for commercial real estate has been felt across the country. With this change, more and more companies are scrambling to get a foothold in the upcoming cannabis gold rush and in turn, will need to rent spaces.
According to RE/MAX Commercial, two western Canadian cities are going to become commercial real estate hot spots for the cannabis market: Kelowna, B.C. and Edmonton. Both cities are quickly turning into leaders of Canadian cannabis production with big-name growers such as Doja Cannabis and Aurora Cannabis finalizing their production facilities this year. As a result, Kelowna and Edmonton are expected to see an increased demand for commercial real estate as investors rush to get their cannabis retail licenses.
“Cannabis is adding an additional demand segment to the overall market, for industrial or retail. It’s good news from a landlord perspective.””
Aurora Cannabis has arrived already in Edmonton and is in the process of finishing its 800,000 square foot Aurora Sky hybrid greenhouse. With that, commercial real estate vacancies in the Alberta hub are expected to fall as the demand for new spaces rises. The city of Edmonton has revealed 242 cannabis retail applicants on the city’s website this far. As for Kelowna, the B.C. city has already identified over 900 potential sites for dispensaries.
As more dispensaries and retailers open up, their need for storage will increase as well. Both cities are planning for a higher demand for industrial storage space brought on by the industry. Overall, the cannabis industry is going to be of benefit for owners renting out these spaces.
“Cannabis is adding an additional demand segment to the overall market, for industrial or retail,” stated Elton Ash, the regional executive vice-president of RE/MAX of Western Canada. “It’s good news from a landlord perspective.”