Want proof that marijuana is going mainstream? Look no further than the wealth management conference that kicks off Thursday at the Hyatt in Huntington Beach.
Between discussions on tax strategies and building a real estate portfolio, experts will offer tips on investing in cannabis real estate to guests that have paid upwards of $2,000 a pop to soak it in.
The new rules on marijuana in California and other states are starting to rouse the curiosity — if not yet the money of — investors of all stripes.
“It’s really opened up in the real estate space for investment opportunities,” said Stacey Kelly with IMN, the New York-based firm organized that organized this week’s third annual Real Estate Family Office & Private Wealth Management Forum.
Medical marijuana has been legal in California for 20 years. But the state is just now working on plans to regulate and license medical cannabis, which has prompted many outside entrepreneurs and major investors to start eyeing the market for the first time.
The state also is prepping to legalize recreational pot sales on Jan. 1, something that became reality with the November passage of Proposition 64.
The coming rule changes are paving the way for an even larger market that’s got investors at least interested in learning how they might participate.
“Right now there’s a marijuana craze,” said Aaron Herzberg, who heads up the Santa Ana-based cannabis real estate firm CalCann Holdings and will be moderating Thursday’s panel at the IMN conference. “It’s just starting, and we’re not even at the beginning of the upward slope.”
There are serious opportunities for savvy investors, Herzberg said, with the price of a warehouse in Long Beach jumping from $140 or $150 per square foot to $200 or $300 per square foot once the city voted to allow an unlimited number of indoor cannabis farmers to set up shop.
But real estate ventures are always risky. And cannabis real estate includes unique challenges, he said, with some California cities already seeing their short-lived land rushes fizzle due to problems plaguing the industry.
One of those challenges is finding a city that welcomes cannabis ventures and has industry-friendly policies in place, since local governments get to decide whether to license such ventures or to add additional taxes and regulations on top of what’s handed down from the state.
“It all comes down to the local approval and the local level,” said Sacramento-based legislative consultant Max Mikalonis, who helped write the state’s new medical marijuana laws and is also speaking at the IMN conference.
The goal, of course, is to buy or lease land even before that city publicly states that it plans to allow marijuana businesses.
As soon as a city starts accepting…