Cannabis Industry

Shifting public attitudes and increased legalization among states has provided an upswing toward medical and adult-use cannabis, and has resulted in an attractive opportunity to invest in the real estate sector, focusing on legally licensed and operated properties.  Increased sophistication of the regulated cannabis industry and the incorporation of strong business, operational, and compliance practices have made the sector more attractive for investment. Increasingly, state-licensed cannabis cultivation, processing and retail facilities are becoming sophisticated business enterprises that use state-of-the-art technologies and well-honed business and operational processes to maximize product yield and revenues.  Additionally, growers and producers have developed a broadening portfolio of products into which they are able to incorporate legal cannabis in a safe and appealing manner, including including edibles, drinks, and topicals.

The Regulated Cannabis industry has generally been driven by state law and regulation; thus, the market varies on a state-by-state basis. Nova Net Lease has identified favorable conditions for investing in real estate assets that support the Regulated Cannabis industry:

·  Significant industry growth in recent years with continued growth in the future. 

·  Shifting public opinion and increasing momentum toward the legalization of cannabis, especially as it relates to Medical-Use Cannabis.

·  Congressional enactment of annual appropriations acts that prohibit the Department of Justice from spending funds to interfere with the implementation of state Medical-Use Cannabis laws.

·  Limited access to capital by conventional industry participants, due to banking and money transfer limitations driven by federal law.

Nova Net Lease Management has observed a consistent trend for market growth through the legalization of Adult-Use Cannabis, and expects a significant increase in the overall size of the state-legal market as more states implement new laws.

1 in 3 Americans now live in states where cannabis is legal for anyone at least 21 years old. 

In 2020, the U.S. state-legal marijuana market was estimated to generate up to $16.3 billion.  Additionally, the U.S. regulated cannabis market is projected to grow to $33.9 billion by 2025, representing approximately 72% of total global spending on legal cannabis.[1]

Polls throughout the United States consistently show overwhelming support for the legalization of medical cannabis, together with strong majority support for the full legalization of Adult-Use Cannabis.  According t is estimated that 67% of the U.S. public supports legalizing cannabis for adult- use.[2]

[1] Source: Arcview Market Research / BDSA. 

[2] Source: Pew Research Center