Article by Diana Olick, CNBC
It could be the hottest outgrowth of the pot-conomy — highly lucrative for both investors and cannabis companies. The industrial real estate that houses pot production is in high demand, and it is about to become the first opportunity for investors large and small to get in on marijuana.
How? The biggest problem for cannabis growers and suppliers is an inability to get much-needed cash to grow both their products and their businesses. Since cannabis production and use is not legal under federal law, only state to state, most banks won’t lend to cannabis producers. Enter, the real estate angle.
The first-ever cannabis REIT (real estate investment trust) filed to go public last week and is in talks to acquire its first property in New York state for $30 million, according to a prospectus.
Innovative Industrial Properties, a newly formed corporation, will focus on buying the properties of specialized industrial medical cannabis facilities. That will provide the cannabis growers and sellers with plenty of capital; the REIT, in turn, will offer the cannabis companies lease-back deals so no one has to move.
As the appetite for cannabis grows, so too, can the profits for the REIT, which will collect rent as well as benefit from increasing property values.