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Maryland’s medical marijuana industry still taking shape, but already making waves in real estate

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Since the Maryland Medical Cannabis Commission gave pre-approval last summer to 15 firms to grow medical marijuana, the industry has taken down nearly 1 million s.f. of industrial space across the state. Excluding large-box leases, move-ins from medical marijuana users accounted for 16% of Baltimore and Suburban Maryland’s net absorption over the past year.

Growers have taken down a variety of industrial spaces, but the majority have gravitated toward Class B & C properties with ceiling heights under 20’ and other building attributes that are dated for most warehouse users today. Holistic Industries in Prince George’s County is one of the exceptions with their 72,000 s.f. Class A building delivering this summer. In December 2016, Atapco sold Holistic’s land site at 9220 Alaking Court for $40 per FAR, setting a high watermark for Prince George’s County industrial land sites.

While growing operations have taken down space over the last year, dispensary locations are still rolling out. At the beginning of July, Maryland regulators approved the first dispensary in Frederick County at 4606 Wedgewood Road, a 6,315 s.f. flex building. However, zoning challenges and neighborhood opposition are elevated, including most recently in the Baltimore suburb of Nottingham. JLL has tracked that only 39 out of the 92 pre-approved dispensary licenses have landed, suggesting additional friction over the coming months as dispensaries identify and lease locations.

Source: JLL Research




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