Grand Junction voters will once again decide whether or not the city council may allow marijuana businesses to operate in the city.

City voters rejected medical marijuana businesses back in 2011. But the issue has returned to the April 6 municipal election ballot. 

Provided voters repeal the 2011 measure as well as approve a marijuana tax measure, the council could move ahead with regulations allowing a marijuana business or businesses in the city.

The question arises: How do marijuana businesses affect commercial real estate?

The National Association of Realtors published a report based on a survey of its members in late 2019.  Here’s a summary of the results of the survey:

In states where prescription and recreational marijuana use is legal, 34 percent to 42 percent of NAR members reported increased demand in warehouses, 18 percent 
to 19 percent reported increased demand for storefronts and 16 percent to 21 percent reported increased demand for land.

While 13 percent to 22 percent of members reported an increase in commercial property values near marijuana dispensaries, 5 percent to 18 percent reported a decrease in values.

In states where only medical marijuana is legal, about 20 percent of members noted some tenants don’t want to be near dispensaries. In states where both medical and recreational marijuana were legalized in the past three years, about
33 percent of members reported tenants don’t want to be near dispensaries. In states where medical and recreational marijuana have been legal more than three years, just under 50 percent of members said tenants don’t want to be near dispensaries.

Commercial real estate members most frequently cited concerns over smell when leasing to marijuana-related businesses, followed by theft of cash on properties, moisture issues and fire hazards.

One conclusion that could be drawn from the survey results is marijuana businesses affect commercial leasing and occupancy even as property values near dispensaries remain on average relatively unchanged.