Within the next three years, eight of Canada’s most acclaimed medical cannabis companies will necessitate as much as eight million square feet of agricultural space, according to the Rolling the Good Times study published by JLL on February 15.
In an attempt to find the best spots for cultivation of the green herb, Cannabis cultivators in British Columbia (B.C.) are setting their sights on blue-collar towns. This news comes following a surge in demand for recreational Cannabis, which is estimated to bring in $1.1 billion in Canada by 2020.
Another area that is piquing the interest of growers in B.C. is the Agricultural Land Reserve (ALR). Extending for approximately 47,000 square kilometers, the ALR will be granted for plant production purposes due to the fact medical cannabis production is categorized as ‘farm use.’
Cannabis Legalization in Canada will Boost Real Estate Prices
Cannabis is anticipated to get the legal go-ahead throughout Canada by this summer. If the outcome of Cannabis legalization in the United States is anything to go by, industry demand in Canada will soon skyrocket.
The price of commercial real estate throughout nationwide provinces is forecast to rise as a direct result of cannabis legalization in Canada. To ensure the ever-growing demands are met in New Brunswick, Quebec, Saskatchewan, Ontario and Alberta, industrial space must be sufficient. Out of these major provinces, Alberta will see the highest demand for agricultural spaces, followed by Ontario.
During the fourth quarter of 2017, over 722,000 square feet of industrial space was leased or sold in Metro Vancouver. Some companies are now seeking out as much as 30,000 square feet of distribution space, but the price tag is not likely to be cheap.
Recently, a Chilliwack-based industrial building just half that size went on the market for a whopping $4 million. An alternative move by True Leaf Medicine International Ltd. will see a segment of industrial structures being transformed into a growing facility.
Leading Canadian Cannabis Companies Support the Move
Medical and commercial Cannabis cultivation is set to commence countrywide, as some of the industry’s biggest brands start focusing on agricultural spaces.
Examples of the well-known companies that are converting greenhouses and establishing Cannabis production facilities on farmland include Canopy Growth (TSX:WEED), Emerald Health (TSX-V:EMH), Aurora Cannabis Inc. (TSX:ACB) and Medigreen Wellness Products Ltd.
Developments of this kind could potentially help the economy by creating jobs in B.C. towns where disused mine sites and mills currently stand.