Canna-Business Gets Contact High
While the laws and regulations surrounding this specialty are new to the CRE industry, many leases and sales already in the books, such as the first cannabis hedge fund to be located at 330 Fell St.
SAN FRANCISCO—The softening of state and federal drug laws in recent years has allowed the cannabis industry to flourish, posting close to $29 billion in sales in 2018. With more than 6 million square feet of class-C commercial space gobbled up by marijuana businesses in Colorado alone since 2010, there are many commercial real estate professionals paying attention to the industry, according to Apto, the commercial real estate software company.
And while the laws and regulations surrounding this specialty are new to the CRE industry, many leases and sales already in the books. For example, office space located at 330 Fell St. will be the new headquarters for the first cannabis hedge fund, Poseidon Asset Management. Founded by siblings, Emily Paxhia and Morgan Paxhia, the hedge fund focuses on cannabis as a medicine and component that can aid people in living sustainably and responsibly.
“Poseidon’s ability to turn the cannabis industry into a lucrative financial vehicle will help aide destigmatize cannabis nationally, especially in the eyes of the white collar community,” Jake Levinson, sales and leasing associate with Starboard Commercial Real Estate, tells GlobeSt.com. “Here in San Francisco, we are seeing an emergence of cannabis commerce in all forms. New technologies in cannabis-related software, retail, cultivation and distribution are finding San Francisco to be a welcoming home.”
The new headquarters will be located in the Hayes Valley district, near dining and retail. The space includes the entire top floor, two private offices, conference rooms, large windows and skylights.
Because of the special considerations surrounding the marijuana industry, there are many commercial brokerages dedicated solely to facilitating cannabis real estate transactions that are popping up in Colorado and California. Levinson alone has facilitated four canna-business transactions this year.
He brokered GreenRush’s move to a new office in the Mission District, Poseidon Asset Management’s headquarters move to Hayes Valley and Billowby.com’s move to Dallas. Levinson is also working with a local dispensary chain to secure its next retail location.
This demand spike has also brought challenges. Some cannabis tenants need space that requires pricey upgrades such as security enforcement, thus higher rents, says Apto.