In 19th century America, pioneers were urged to “Go west” to seize opportunities arising from the country’s westward expansion. But high-net-worth (HNW) investors and family offices eager to capitalize on 21st century interest in properties serving the industry for legalized marijuana might want to “Go east.”
Executives involved in the burgeoning industry surrounding legalized marijuana say today’s property gold rush isn’t taking place in states like California and Colorado where marijuana laws are already in effect. Instead, they say, it’s taking off in states like Michigan and New Jersey that are poised to legalize recreational marijuana.
In November 2018, voters in Michigan will likely get the chance to consider a ballot initiative that would legalize recreational marijuana. Meanwhile, support is building in New Jersey for legalization of recreational marijuana now that pro-pot Gov. Phil Murphy is in office.
In all, nine states and Washington, D.C. currently allow the use of recreational marijuana, although Maine’s law has been stalled. But those states shouldn’t be the main focus of HNW investors or family offices pondering purchases of marijuana-related real estate, experts say, because investors likely already scooped up many of the most desirable properties.
Rather, a state like Michigan or New Jersey that’s on the brink of legalization should be a target for investors in pot-related real estate, they note.
“The early bird gets the worm with this stuff. Now is the time to get involved,” says Troy Dayton, CEO of San Francisco-based The Arcview Group, an investment and research firm specializing in the marijuana industry.
Mark Scarola, chief operating officer of Murrieta, Calif.-based GreenZone Properties LLC, a real estate developer and fund manager that focuses on the marijuana industry, offers a cautionary note, though. In many markets, particularly where legalization is pending, investing in marijuana-related properties remains “kind of a gamble,”