Legal cannabis will likely mean big business for commercial real estate in the Okanagan says a new report from real estate company RE/Max.
The report has highlighted Kelowna as one of two cities in Western Canada primed to become commercial real estate “hot spots” as a result of legalization.
According to RE/Max, lease rates for industrial spaces in the area are also expected to rise as marijuana companies vie for more space to house their operations.
Kelowna is already home to two separate DOJA Cannabis growing facilities, located in West Kelowna and on Highway 97, that total 30,000 square-feet in size.
Another massive 85,000-square-foot cultivation and research facility owned by Flowr Cannabis is preparing to break ground this week.
Kelowna City staff has established 913 possible locations for cannabis retail stores, that will include spots in the Lower Mission, Rutland and near Kelowna International Airport.
RE/Max's report predicts commercial space for dispensaries will see an uptick once Kelowna begins approving retail cannabis business licenses.
This increase comes after Kelowna’s real estate market saw an 8% decrease in total sales value for its commercial property year over year.
Meanwhile, Edmonton was also identified in the report as a cannabis "hot spot", where vacancy rates are expected to drop and lease rates to moderately rise for the remainder of the year thanks to the arrival of Aurora Cannabis.
“Cannabis is adding an additional demand segment to the overall market, for industrial or retail,” said Elton Ash, regional executive vice-president at RE/MAX of Western Canada.
“It’s good news from a landlord perspective.”