At first, the laughs over my gummies reference startled — why are these real estate pros guffawing at the mention of candy?
But then I got it. I’m immersed in the cannabis industry, and fluent in cannabis sales data thanks to my gig at BDS Analytics. And so I know that gummies are the most popular form of cannabis edible in California – that they, in fact, are one of the most sought-after cannabis products in general across the state.
But to the cannabis newbies in the room, it struck a chord. Seriously? Cannabis gummy bears? No way!
Yes way. And important for real estate professionals to understand. Cannabis matters not just to the people opening the shops, growing the Kosher Kush and, yes, making those gummies. Attorneys are flocking to the space. Data gurus like the team behind BDS Analytics are leaving traditional industries like natural foods and sporting goods and turning to cannabis. Marketers are in full-embrace.
But probably no other industry in California has more opportunities to work side-by-side with the growers, brands and stores than real estate. After all, all of these businesses require space, ranging from traditional offices to storefronts to much larger buildings dedicated to growing, to turning flower into extractions and to crafting sodas, pills, lotions and gummies. And unlike any other industry, much of the manufacturing must take place in California — outsourcing, a strategic centerpiece for so many industries, is not an option. The grows, the extracting, the product manufacturing — all of it and more is required to remain homegrown.
The on-the-ground real estate environments in cities and towns ranging from Long Beach to Oakland to Fresno represent the first points of consideration for real estate pros interested in the cannabis industry. What is available, and where? How does zoning shape the industry — probably no town in California is going to license an extraction facility in the middle of a residential neighborhood, or in a commercially vibrant downtown. How much are landlords and potential sellers in favorably zoned areas charging cannabis businesses? Does it make sense to hunt for space in far-flung, but more affordable, areas?
But I think retail sales data — this is the very marrow of my professional world — is also vital for commercial real estate professionals.
At BDS Analytics, we understand better than any other business the trends shaping this dynamic industry, and we view them as they unfold and evolve, rather than observing them through the rear-view mirror.
We know, for example, that vape pens are far more popular in California than in other states, and we understand what goes into the production of vapes — lots and lots of cannabis (vapes need large volumes of flower, which then is concentrated into extracts that possess key cannabinoids like THC and CBD). This means demands for growing space — and cultivation facilities generally need a lot of square footage — will continue to hike. Californians also have a particular fondness for baked goods like cannabis cookies and brownies, which requires fairly large manufacturing facilities, complete with commercial kitchens and industrial ovens.
The list of valuable data points for people in the real estate business is more like a flood than a scattering of puddles. This cannabis tide in California is rising — rising fast. Trends evolve rapidly, and each of them places fresh demands on real estate inventory, regulations and prices. Real estate professionals who pay close attention, and anticipate these swift evolutions in real-time, just might count on cannabis to set them off on a wild ride, one full of characters, commercial dynamism, entrepreneurial ferment and loads of opportunities.
Author & Fan of Data – Tamar Maritz
California Regional Director, BDS Analytics