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brycewheeler
Well a little off-topic but not as bad as political debates.

Here's the deal.  California and 4 other states are voting in Nov. to legalize recreational grass, having already legalized marajuana for health reasons with a prescription.  Some medical experts say it helps thousands of people with pain, seizures etc. when no other remedy works.  The present time still seems to be early in a possible up-cycle.

I am not a grass user and don't care if it passes or fails, but I think it will pass in Calif. and probably the other states as well.  Not sure but I think other states voting on Marajuana are Neveda, Arizona, Maine and not sure of 5th state.  Each state now spends millions arresting
basicallly non'violent users as criminals with very questioable results.

Regardless of one's opinion on marajuana, if it is legal, maybe it is worth a legal investment in some land for crop cultivation, greenhouses, distribution or whatever since it is early in this product cycle.   I don't know if any reliable investments exist which would capitalize on the probable coming approval of marajuana in California but maybe some of you out there have ideas on how someone could capitalize on reliable, public investments in this area without undue risks.  Any positive idea anyone?

Bryce
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stevel
We have been buying some industrial space.  One of our assumptions is that crops will be grown indoor in California.  

I don't really want to rent to marijuana tenants; in fact my banks probably will not loan me money if I do (marijuana is still federally illegal).   

Legalization will probably increase rents and values of industrial space as a whole.  

There are some really interesting articles about grow zones.  Desert Hot Springs and Adelanto are two cities that allow growing.  
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brycewheeler
Hi Steve.

Insofar as marijuana being illegal federally, I think this will change in a few years or sooner.

Insofar as banking is a problem in this industry, I think that will change even sooner federally because of all the state pressures where marijuana is legalized, and now especially if California approves the legality of recreation use because the dollar numbers are getting huge.  California expects over a million in income from tax on marijuana the second if not the first year and the problems caused by marijuana being a cash only business is just crazy and subject to all kinds of abuse.  I think marijuana income becoming bankable will happen very quickly if proposition 64 passes in California making marijuana legal.  Just my opinion.

Bryce
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MJohnson
Just buy a Dunkin Donuts franchise..... [biggrin]


I actually had a client ask about buying greenhouses in anticipation of this.  Advise you to have a Plan B exit strategy in case your new "highest and best use" doesn't pan out....
Matt Johnson, Certified Distressed Property Expert (CDPE)
Solutions Real Estate
CA DRE License #01881265
(619) 917-8143
matt@rds-investments.com
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larrywww
1. As soon as the landlord gets his first letter from a federal prosecutor (or from a county prosecutor enforcing zoning ordinances) threatening to forfeit of the building as an instrumentality of a criminal enterprise I think you will quickly rethink your plan.  Unless the marijuana enterprise owns the building, I have NEVER seen a landlord do anything but comply immediately.  No landlord is going to want to lose his building to the feds.   And Yes, the feds (and/or local prosecutors enforcing zoning standards) still send these letters out and dispensaries are illegal in most municipalities (as a matter of zoning and/or criminal law).  The State of California statute that was originally passed didn't order municipalities to accept dispensaries---and most of them nixed the idea.  And in the vast majority of cities it is STILL illegal to start a marijuana retail store, they are specifically prohibited in most cities.  This has encouraged the rise of marijuana delivery services, BTW, another unintended consequence.

2. Most of the small dealers are against legalization because they think (maybe rightly) that Big Tobacco and/or other big spenders (maybe even hedge funds) will quickly take over the market.  IMHO this is a fantasy---the small investors thought they would dominate the housing market in 2010 until the hedge funds arrived in droves. etc etc

3. There are alot of dealers out there who take marijuana from states where it is legally grown and sell it for higher prices in places where it is illegal.  But that IS a crime.

4. The net effect of legalization isn't exactly what you think it will be---It's not going to put the Mexican cartels out of business.  Sure, it may hurt the Mexican Cartels in terms of marijuana shipments.  So what?  But then they promote other more dangerous drugs like Crystal meth, heroin, opiates that are far MORE addictive and dangerous----some drugs will ALWAYS be illegal.   And the Cartels have since branched out into kidnapping, extortion, etc----this really isn't a better outcome, if you think about it.  As long as the Mexican central and local governments are weak, these criminal gangs will always be around. 


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Greg
I don't know about the business aspect but it seems like we have a built in proving ground in Denver. See how those guys are doing and what works.
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stevel
brycewheeler wrote:

Insofar as banking is a problem in this industry, I think that will change even sooner federally because of all the state pressures where marijuana is legalized, and now especially if California approves the legality of recreation use because the dollar numbers are getting huge.  California expects over a million in income from tax on marijuana the second if not the first year and the problems caused by marijuana being a cash only business is just crazy and subject to all kinds of abuse.  I think marijuana income becoming bankable will happen very quickly if proposition 64 passes in California making marijuana legal.  Just my opinion.

Bryce


I am far from an expert on this but from what I understand, California is going to create their own bank that will handle these transactions.  I see that happening a lot quicker then federal legalization.  

Most of the banks I borrow 4% money from are very risk adverse.  So by the time they will loan money to the industry the opportunity will be past.  
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larrywww
Here is a discussion of a stock that appears to be related.

http://www.themoneystreet.com/why-is-the-healthcare-ma-industry-on-fire-b/?utm_source=yahoo_gemini_ecossi&utm_medium=yahoo&network=yahoo
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brycewheeler
Thank you Larry.

Bryce
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brycewheeler
LOTS OF TINY PUBLIC MARAJUANA COMPANIES OUT THERE

Been doing lots of research and found probably 60 or more micro companies out there related to legal medical cannabis categories, some real estate, some cultivation, some pain or seizure research, some services like security, banking, water, hydroponic equipment, garden systems, greenhouses, lighting, consulting etc etc.  These are public companies most with little info, some with almost no info.   There are only couple of big known companies (GWPH,  INSY) related to cannabis.  Most are small, tiny microcaps and speculation in them are just that -- SPECULATION, not investments, as RISKS are great.  Some of these stocks will increase 40% in one day only to go down 35% next day or two days later, with very little news (or none) for explanation.  These legal, speculative stocks are not for the faint of heart or anyone afraid of losing  lots of $$ as well as winning  $$,  so I DO NOT AND WILL NOT RECOMMEND ANY OF THESE COMPANIES TO ANYONE.  

Its a total crap shoot and you may do better at Vegas with less risks.  Some of these co's may even be "pump and dump" traps for all I  know.  Many of these stocks are "penny" stocks or stocks under $5.00 known to be a risky, unreliable  category.  Anyone can GOOGLE these type of stocks if they have an inclination to explore and have some spare hours.  Some are easy to find but many are not.



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chatterweb
I co own a small commercial property in the zip code 91301 (Agoura Hills CA) with my sibling.

My parents bought it in the 70's and there are 2 separate parcels on one lot. My Father owns one 3 story building, and me and my sibling co own the other one story warehouse type of property, it has a shared driveway.

One day, we will own the 3 story building, but for now, we will not sell because my Father needs the rental income from his 3 story, and both need to be sold together.

He already named the adjacent parcel to me and my sibling in a trust. He also told me one day it would be ours.

Same tenant for 22 years, a commercial painter...slow to pay $900.00/month but with $1800/year in

real expenses...it's all good.

Everything is rolled into a trust since 2008. The commercial property and the bank account.

I am CO Trustee.

If my sibling was not so conservative I would pursue renting the property out to the ones who are on weed maps...

I think weed maps is a good place to look to determine where the activity is...

JMHO


Dogs have owners. Cats have staff.
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larrywww
Horrible idea, really.

I'm a commercial leasing agent (among other jobs I have), so I get the solicitations from weed businesses all the time.  

From my perspective:

1) The prosecutors really do send letters that they will forfeit the building as proceeds of illegal activity.  Or maybe they threaten $10,000 a day fines.  (This is code enforcement, so I wouldn't mess with them).  Why would any building owner want to deal with that?

2) Only owners in dicey places (think San Bernardino, Pomona maybe, Compton) are willing to even consider renting to weed businesses because they are so desperate.

3) The weed businesses will tell you anything to get a rental, it's that hard for them to persuade a landlord to do anything this foolish.  What I would tell them is to buy the building then they can take that risk.  None of them have ever seen fit to do so.  These guys aren't libertarians or hippies, they are more typically dirtbag criminals (and they usually have committed crimes other than drug related ones).  And they are compulsive liars, they will tell you anything to get a rental, etc.

Agoura Hills (in Ventura County) is a very desireable place to own a commercial building.

Why would you be so desperate???  

It's your choice, but I don't get it, really.


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kaihacker
Larrywww, being a commercial leasing agent, I can imagine you are approached by tenants about this often. I have one mixed-use building, a store front with an apartment in the back. I bet 80 to 85% of tenant inquiries I get for the store front, are weed related.  I have rented it to a hydroponics supply guy in the past.  There was a lot of pictures of weed in the store, but no weed itself, at least that I knew about.

Gene Hacker

Passive and active real estate investment opportunities.
http://RiverLakeRE.com riverlakere@gmail.com

Home Inspections in Bakersfield and all of kern county:
http://bakersfieldinspections.com
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brycewheeler
To stay on-topic, there are some real estate related cannabis investments.  Steve! on this board discussed leasing greenhouses and other ideas.

The coming marajuana industry is a minefield for investors.  Problems include legalization, federal prohibitions,  banking problems,  city ordinance prohibitions on retail sales, and cultivation, threats of  federal takeover of property etc.  To avoid some of these you almost need to own the land and even then there are still lots of pitfalls left.

However there are some tiny companies that have real estate goals in marajuana as their primary purpose.   Some are ZDPY (Zoned Property in Arizona), PRRE  (Praetorian Properties in Arizona), CBGI,  and TRTC (Terra Tech, California) who deal in turn-key greenhouse units for cannibus. I am sure there are many more small companies who lease or control or own greenhouses, with some even having retail dispensories.  Maybe some of these companies know what they are doing and maybe not.  I don't recommend any of them as they are very, very  risky but mention them for you to look at if curious.

Larry on this Board, and others,  have outlined many of the problems faciing this new possible industry.  There will be lots of fast moving changes for cannabis in the years ahead.
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uktammambetov

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brycewheeler
Correction.  The tiny pot company that deals in turn-key condo units symbol is GRWC, Grow Condos.  TRTC, Terra Tech of Newport Beach has two new medical pot dispenslries in Las Vegas area I believe.  Anyway all these tiny companies are risky so only invest what you are prepared to possibly lose.
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chatterweb
larrywww wrote:
Horrible idea, really.

I'm a commercial leasing agent (among other jobs I have), so I get the solicitations from weed businesses all the time.  

From my perspective:

1) The prosecutors really do send letters that they will forfeit the building as proceeds of illegal activity.  Or maybe they threaten $10,000 a day fines.  (This is code enforcement, so I wouldn't mess with them).  Why would any building owner want to deal with that?

2) Only owners in dicey places (think San Bernardino, Pomona maybe, Compton) are willing to even consider renting to weed businesses because they are so desperate.

3) The weed businesses will tell you anything to get a rental, it's that hard for them to persuade a landlord to do anything this foolish.  What I would tell them is to buy the building then they can take that risk.  None of them have ever seen fit to do so.  These guys aren't libertarians or hippies, they are more typically dirtbag criminals (and they usually have committed crimes other than drug related ones).  And they are compulsive liars, they will tell you anything to get a rental, etc.

Agoura Hills (in Ventura County) is a very desireable place to own a commercial building.

Why would you be so desperate???  

It's your choice, but I don't get it, really.




I am not desperate, just looking forward.

Dogs have owners. Cats have staff.
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rickencin
brycewheeler wrote:


The coming marajuana industry is a minefield for investors.  Problems include legalization, federal prohibitions,  banking problems,  city ordinance prohibitions on retail sales, and cultivation, threats of  federal takeover of property etc.  To avoid some of these you almost need to own the land and even then there are still lots of pitfalls left.



Case in point:
http://www.forbes.com/sites/instituteforjustice/2016/11/02/cops-raid-medical-marijuana-business-seize-over-100000-including-teenage-girls-college-savings/?ref=yfp#6fdda70e70d8

"Discovering a safe, law enforcement cracked it open and found roughly $325,000 in cash stored inside. The owner of Med-West, James Slatic, even said police high-fived each other when the raid ended.

...Following the raid, San Diego police executed seizure warrants for the business’s cash and two more targeting James’s family, seizing more than $100,000 from their personal savings and checking accounts. Those funds are completely unrelated to Med-West. James lost $55,000; his wife, who works as a V.A. hospital technician, lost $34,000. Even their two teenage daughters did not go unscathed: Police seized their entire college savings, a combined $11,260.

...Neither James, his wife nor their two daughters have been charged with any crime. Nor have any of Med-West’s employees been indicted in connection to the raid (the employees who were arrested were ultimately released without any charges). Yet San Diego law enforcement has refused to return the cash it seized. Today, more than nine months after the raid, prosecutors still haven’t even brought a civil forfeiture case against the Slatics’ personal bank accounts."

I'll bet there's a feeding frenzy over who gets to keep the cash.

Rick
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rickencin
Smoke 'Em, If You Got 'Em!
Rick
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CGabhart
Here is an article on a  local Reit with a focus on buying Industrial space....
http://www.sandiegouniontribune.com/business/sd-fi-marijuna-ipo-20161019-story.html

I think their jingle is "Buy Low Sell High"
Curtis Gabhart, CCIM
Website | Facebook |Linkedin | Twitter | Meetup
Loopnet Profile


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marcos
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