A warehouse that has been left empty for some time.


Cannabis Industry Could Drive Warehouse Sector in California

Legal cannabis growers in California will likely drive up warehouse rates and be a boon for some publicly traded industrial warehouse companies with significant exposure in California who are willing to do business with the sector, according to a Reuters report. Fund managers and analysts predict that the warehouse sector as a whole could benefit even for companies that don’t deal directly with cannabis industry.

Michael Underhill, a portfolio manager at RidgeWorth Capital, said that cannabis companies are expected to pay more-than-market prices for older facilities, which will drive up rent prices in a market that is already tight. Operators of more modern facilities will likely be able to charge higher rents as space consolidates.

“Cannabis companies are going to find some distressed properties and get them up and running, and in many cases they will have the capital to pay whatever it takes to get space,” Underhill said in the report.

A spokesman for Rexford Industrial Realty Inc., a publicly traded real estate trust, indicated that the “new demand is expected to be a benefit” but said the company would not lease space to cannabis businesses.

According to figures outlined in the report by real estate data firm CBRE Inc., warehouse rents in Colorado jumped 10 percent after legalization in 2014.

Get daily cannabis business news updates. Subscribe

Have an additional perspective to share? Send us a message to let us know, and if your comment is chosen by our editors it could be featured here.


Latest Cannabis News

View all news Get email updates

Create a profile View all categories

From Our Partners