New York is set to inject $200 million into the local marijuana real estate market, leasing up to 150 retail properties that will be given to social equity businesses to give them a leg up in the state’s new recreational market.
The move is believed to be the first of its kind in the U.S. cannabis industry, and, if successful, could provide a road map for other states rolling out social equity programs.
At least one brokerage firm, CBRE Group, is already scouting locations on behalf of the Dormitory Authority of the State of New York (DASNY), the agency overseeing the disbursement of the funds, a DASNY spokesperson confirmed in an email to MJBizDaily.
CBRE representatives are “looking for good retail locations throughout the state located in municipalities that have opted in to allow retail dispensaries,” according to the spokesperson, Jeffrey Gordon.
The brokerage firm declined to comment.
Ripple effects
While the DASNY said that no leases have been signed for social equity companies, industry insiders say the government’s entrance into marijuana real estate is causing ripple effects for other businesses – particularly smaller operators.
“They’re out there. They’re pounding the pavement,” Donny Moskovic, a real estate broker at Katz & Associates in New York City, said of CBRE agents.
Moskovic has been working with Cresco Labs – one of the state’s 10 existing medical marijuana licensees – to expand the Chicago-based multistate operator’s retail footprint in anticipation of the adult-use market’s launch.
Moskovic said there’s been a “frenzy” in the New York real estate market this year as entrepreneurs prep for the recreational market’s rollout, which could happen later this year.
“They’re everywhere. They’re looking at all locations,” Moskovic said when asked where CBRE is looking for retail spots.
He said CBRE is almost certainly already looking in every municipality that didn’t already opt out of legal cannabis sales, including New York City as well as upstate.
“If you speak to their broker, their broker tells you there’s $50 million in a fund, sitting there, already out of the $200 million, and they’re executing deals.”
The real estate support for social equity applicants has drawn praise for New York’s progressive approach to promoting diversity and increasing business opportunities for those affected by the nation’s war on drugs.
But it also has triggered concerns among local entrepreneurs and real estate brokers, some of whom contend that real estate agents working on behalf of the state might increase competition – and prices – for smaller operators also hunting for retail properties.
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By John Schroyer, Chief Correspondent
June 21, 2022 - Updated June 21, 2022
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Source : MjBizDaily
Link to original study: New York spending $200 million on marijuana social equity properties
