Appraising Cannabis Facilities

[Terrel L. Shields]

Just finished the ASFMRA course on cannabis grow operations. Lots to learn, and it is clear that legalization means more of these will be built. Very valuable...currently. But reminds me of the trend of emu farms and ostrich farms 20+ years ago...High prices until the breeding supply went into a glut and the price crashed. All that blue Emu Oil and emu burgers....well, not so much. Arkansas passed in 2016 med version with very tight controls. Oklahoma passed in 2018 with virtually no controls but the "medicinal" stuff is mostly CBD, not THC ??? Clearly grow farms will increase if the feds decide to simply hand back that drug to the states. I mean there is something wrong with the idea that Marijuana is a Class 1 drug but cocaine is a Class 2 drug ???

On a lighter note, ASFRMA found some state boards refuse to give CE for the class (a rarely for a major society) because "it's illegal"....well, yes and no. We had sandwiches catered in, brownies afterwards....anybody got any Doritos?

 

[Tim The Enchanter]

Mary Jane makes some goooood brownies.

 

[Elliott]

I assume growing soybeans has better price stability. I notice from time to time someone is caught growing cannabis illegally to avoid the taxes.

 

[KHS445]

My community recently rezoned an area for pot peddlers. They are still going thru the review and licensing process but real estate prices within the designated area have gone nuts. Several properties have doubled and one more than tripled in value almost overnight. Already had a couple of property owners ask if I was aware of the pot property sales and if I would be using them to value their property. Told them absolutely not as those prices are directly tied to very specific zoning changes.

I look at it as being similar to musical chairs. At some point the music is going to stop and someone is going to be left holding the back.

 

[George Hatch]

In our region, Adelanto (San Bernadino County) is an example. They approved cannabis in a small section of town in 2016 and pricing immediately spiked.

In 2016 they had medium sized industrials selling at $200/sf and higher. No sales in 2018 and only one sale in 2019 at $122/sf and that property has an 11% lot coverage ratio. They've still got listings at $200/sf, but there are also a couple of listings at $145/sf and $120/sf so you can guess which will sell and which won't. There are more listings right now than have sold in the last 2 years.

Meanwhile, in neighboring Victorville where it isn't allowed, similar industrials are selling at $90 and $100/sf. So the comparison of the two shows the weed trade has added a premium, but nothing like what it was back when Adelanto was the outlier.

 

[George Hatch]

I should mention in the above that when the city of Adelanto initially approved cannabis operations on town they limited it to a fairly small portion of their industrial zoned districts for a couple years before later opening it up to all of their industrial acreage in 2018 (IIRC). During the $200+/sf days there was a huge difference in the pricing between the can-do vs the can't-do properties. Now that the supply of those properties is exceeding the demand the pricing is reacting accordingly.

Ironically, there's a County jail run by San Bernardino County as well as a privately operated ICE detention facility located in the middle of the original weed zone, so the inmates were in rock-throwing distance of some of these facilities.

 

[Artemis Fowl]

My community recently rezoned an area for pot peddlers. They are still going thru the review and licensing process but real estate prices within the designated area have gone nuts. Several properties have doubled and one more than tripled in value almost overnight. Already had a couple of property owners ask if I was aware of the pot property sales and if I would be using them to value their property. Told them absolutely not as those prices are directly tied to very specific zoning changes.

I look at it as being similar to musical chairs. At some point the music is going to stop and someone is going to be left holding the back.

Seeing exactly this. The "spot" zoning is a major factor IMO. We've had to conduct a study isolating these from the overall commercial/industrial class.

 

[Junior Member]

On a lighter note, ASFRMA found some state boards refuse to give CE for the class (a rarely for a major society) because "it's illegal"....well, yes and no. We had sandwiches catered in, brownies afterwards....anybody got any Doritos?

I have a CE class called “Disasters, Hybrids and Weed.” No problem, of course, getting it approved in California and Oregon. I’m teaching it to an ASA chapter at a buffet lunch on November 14 in Portland, OR.
— Peter Christensen

 

[Terrel L. Shields]

Our instructor was a California girl and she noted that Internment victims from WWII were given 10 acre tracts and many built green houses growing flowers until free trade killed their business. Those went from $500,000 to 4,-8 million with these abandoned or derelict greenhouses fetching premium prices. And back up generators are expensive and black outs hurt... But electricity has to be on not only to grow but to prove to the state your security system is o 24/7. Ironic, the "green" weed crowd gobbles up huge amounts of energy to keep temperatures and humidity ideal, electrify fencing and security, and otherwise, produce a very energy hogging product... no problem.

 

[Ariba]

California is growing so much marijuana it will crash the market. The price of high-quality marijuana in California has tanked currently to $270/ounce or $207/ounce for medium marijuana or lower.