“Retailing is very tough."
Cannabis dispensaries have become a fixture of the retail landscape. Twenty four states have legalized the non-medical use of cannabis. For medical users, that figure climbs to forty. In nearly all cases cannabis is sold through dispensaries, which in many cities are now so common as to be their own category of retail tenant. The exciting novelty of the first dispensaries is gone; the laws of retailing gravity have taken hold and now dispensaries earn their customers’ loyalty with high quality products, affordable prices and engaging customer service. The local pot dealer, RIP.
From the landlord’s perspective, dispensaries often pay high rents, but there’s a downside: Other tenants don’t want to be near them. Recent research - the first to look at local CRE implications of cannabis legalization - found that within a one-mile radius retail rents drop 15% to 29% after a dispensary opens, compared to similar areas without one.1
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