February 17, 2022 – Securing real estate for medical marijuana dispensaries is no easy feat. The expansion of the medical marijuana industry has rapidly increased the demand for cannabis commercial properties. For a site to be deemed suitable for marijuana retail, it must adhere to local zoning requirements, state laws, and federal laws. For example, Ohio state law does not allow any medical marijuana retail dispensary to be located within 500 feet of a school, church, public library, public playground, or public park. Due to such unique circumstances, the number of potential sites is very limited.
Cannabis companies have learned to move quickly to find locations in order to navigate this complex real estate process. Before owners can obtain a cannabis license, they must first acquire a property. Therefore, securing a purchase or lease agreement for a certain location is vital. Competition for sites has been so fierce that many companies even put down non-refundable deposits for a chance at acquiring a site. Certain landlords have deals with multiple dispensaries on the same location, providing the landlord with a substantial stream of income on a vacant space. Further, marijuana dispensaries are extremely profitable. According to Marijuana Business Daily’s 2021 Marijuana Business Factbook, data shows that the average marijuana dispensary makes $974 in revenue per square foot of space, making each site worth fighting for.
The State of Ohio has begun the process of awarding the next round of medical marijuana dispensaries. The winning bids are selected randomly through a lottery, and there will only be 73 new licenses granted throughout the entire State, adding to the existing 57 established locations.
