Recreational Marijuana Sales Are Now Legal in Canada: Should You Invest in Dispensaries?

By Jessica Fiur

This week marks a high point for Canada, as the country is legalizing cannabis sales for recreational use starting today. The best part? So. Many. Marijuana. Puns in journalism copy! I already got one in, and I’m not even in the weeds yet with this blog. That’s two! Do you think I can get to 420? (Actually, I already read an article today about Canada legalizing marijuana where the author said he was going to put things bluntly. That makes me so mad! Why couldn’t I have thought of that first?)

Anyway…

Canada is the second country after Uruguay to legalize recreational sales of marijuana. In terms of real estate, could dispensaries be a new boom for developers and investors?

Government-run stores are expected to pop up everywhere, and licensed growers are already looking to get in on the industry.

After all, there is certainly demand for the product. There are no stats yet, because, again, one of the first countries to legalize recreational marijuana. But it is estimated that Canadians could purchase approximately 1 million kilograms per year. And according to the New York Times, this is expected to become a $5 billion industry.

Harshing Your Mellow?

According to CNN, an issue that could arise is the lack of stock, and officials in Nova Scotia and Manitoba are already saying there won’t be a large selection. It might take a while for legal growers to catch up with the demand. (Though, that might be a good problem to have?)

Someone considering investing in dispensaries will have to read up on all the regulations: for example, you cannot sell pot in the same place as you do alcohol or tobacco. (Though, to quote Matthew McConaughey’s timeless character Wooderson in Dazed and Confused, “It’d be a lot cooler if you did.”)

Also, it’s important to note that not all provinces have the same rules. Saskatchewan, for instance, is not allowing for government-operated retail sales and instead is only allowing for private retails and online sales. Many provinces, however, are only allowing government-operated dispensaries.

What do you think? Is this the new hot CRE asset class? Do you think investors and developers are going to wait for the smoke to clear and see how the industry moves forward first? Could I sound any more like a Narc? We’d love to hear your thoughts. Leave a comment on our Facebook page or send a tweet to @CPExecutive or @JFiur.