GRAND RAPIDS, Mich. (WOOD) — Those hoping to cash in on marijuana in Grand Rapids are working to find places to grow and sell their pot, leading to a scramble that is boosting real estate prices.
The city of Grand Rapids has already OK’d medical marijuana provisioning centers, and those centers will likely serve as the model for the distribution of recreational marijuana.
One of the things that some who advocated for the legalization of recreational use worried about was that it would become a business controlled by wealthy corporate interests, and it looks like that is what happened.
“It definitely takes deep pockets to get involved in this industry,” said Coleman Baar, the president of a small real estate development and brokerage firm looking to help clients navigate the marijuana industry.
The city has been going back and forth on where medical marijuana centers should be allowed. The result is a map that shows the small patches where they may be located, mostly near the borders with Kentwood and Wyoming and a few others spots here and there.
Bill Bussey has spent three decades representing some of the most recognizable West Michigan businesses in finding and negotiating land acquisition. He said the limits on where provisioning centers can locate has had consequences that are making getting into the business even more expensive.
It’s an old-fashioned land rush, he said.
“The medical guys will have first shot at easily getting a license and they can put it adjunct to their property, so that’s where the real profit is,” Bussey said. “It’s going to be a big change for the city. We don’t know what that change is ultimately going to mean.”
Experts say that when marijuana is involved, prices can be as much as three times higher than is normal for commercial real estate.
“Most of them are significantly higher than they could even justify on an appraisal,” Bussey said. “In a lot of cases, it’s people that have come in from other states, come from Canada and they know what they want.”
There are a few areas where the centers can go only if owners can get a nearby church or school or the city parks department to agree to a waiver.
“The problem is going to a church and saying, ‘Can I put a marijuana facility next to your church?’ — it’s not real easy,” Bussey said.
The locations are not, for the most part, prime commercial property.
“Many of the commercial districts are either buffered out or the entire downtown is off-limits,” Baar said.
He said having the centers on the outskirts could have unintended consequences.
“It’s basically going to require that people need to drive to these shops as opposed to being able to walk to their local corner store,” Barr said,
The city has already devoted the equivalent of two or three full-time staffers to tackling medical marijuana development questions amid what has jokingly been referred to as the “green rush.” City Planning Director Suzanne Schulz said officials are working to implement changes that could help relax some of the rules and make things more understandable.
“Hopefully, in the final analysis, when the smoke clears, everybody says, ‘That was a good thing to do,” Bussey said. “City gets more money and people get stuff they were getting anyway.”
“I suspect that 30 years from now, people are going to wonder why it was so difficult to figure this out,” he said.