Cannabis Industry Is Shifting From Buying To Leasing Properties, New NAR Report Reveals

Realtors are seeing a decline in commercial property purchases by marijuana industry-related businesses and a corresponding increase in leasing activity, according to a new survey from the National Association of Realtors.

The 2023 Marijuana and Real Estate: A Budding Issue report examines the effects of marijuana legality on various aspects of real estate. The survey, which polled NAR members, divided the responses by states that have legalized medical marijuana only and states that have legalized marijuana for medical and recreational use both before and after 2018. The survey was emailed to a random sample of 75,000 NAR members who practice residential real estate and 53,000 NAR member who practice commercial real estate.

“State laws have evolved to legalize the use of prescription and recreational marijuana,” stated Jessica Lautz, NAR deputy chief economist and vice president of research. “As more states adopt cannabis laws, Realtors are at the forefront of commercial real estate activity and are working with clients to find land, warehouses and storefronts for this growing business.”

Survey Highlights

• Since 2021, the share of members reporting increased purchasing over leasing by marijuana businesses dropped from 29% to 18%.

• In states with legal recreational marijuana, lease addendums related to growing and smoking on properties are becoming less common. In contrast, prescription-only states saw an increase in addendums added to leases that restrict smoking on properties, jumping from 40% to 62% in the past two years.

• Commercial practitioners see increased demand for warehouses, land and storefronts for marijuana businesses

• In states that launched legal adult-use cannabis program over the last five years, 18% of NAR’s members confirmed an increase in property purchasing over leasing in the past year by marijuana businesses, compared to 29% in 2021.

• In states that legalized marijuana more than five years ago, 14% noticed an increase versus 20% in 2021. While states with only medical marijuana programs, only 4% noticed increase, compared to 21% in 2021.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash