Ontario Cannabis Retailers Race To Sign Real Estate Deals

Article by Marina Strauss, Globe and Mail

Ontario cannabis retailers race to sign real estate deals MARINA STRAUSS

Recreational cannabis retailers are rushing to sign deals for prime real estate locations ahead of the April launch of legal marijuana stores in Ontario, even before the province’s rules for the outlets are clear.
The province is expected in the next several weeks to finalize details of regulations that will clarify which cannabis companies can operate stores, how many outlets each can run and where they can be located. Ontario has said there won’t be a limit on the number of stores over all in the province.
Because of the uncertainty over the regulatory landscape, some of the deals being negotiated would require the retailers to pay penalties that can run into the hundreds of thousands of dollars if the rules ultimately prevent them from setting up shop at their planned sites, according to industry insiders. Bidding wars have even erupted for some coveted leases, driving up prices by up to 50 per cent of market values, they said.
“Cannabis retailers are not waiting – they are acting now,” said real estate broker Dave Marino of Marino Locations Ltd. His client, cannabis retailer Spiritleaf, has signed binding offers to lease about 20 stores in Ontario. Spiritleaf has teamed with producer Newstrike Brands Ltd., which is backed by the Tragically Hip.
“They’re essentially placing their bets on what real estate will qualify under the rules,” he said. “Spiritleaf intends to open as many stores as the limits and legislation will allow … It’s definitely a lot of uncertainty.”

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