Debate Magazine

Cannabis Powered Rent-seeking

Posted on the 04 April 2017 by Markwadsworth @Mark_Wadsworth

Emailed in by Mombers, from the NY Times:
QUINCY, Mass. — At the edge of an industrial park in this suburb south of Boston, past a used-car auction lot and a defunct cheese factory, is an unmarked warehouse bristling with security cameras and bustling with activity. Until recently, the cinder-block structure was home to a wholesale florist, a granite cutter and a screen printer. Today, it is home to just one tenant: a medical marijuana operation called Ermont...
And because the marijuana business comes with added baggage, landlords and property owners are charging a premium for new tenants working in the cannabis business. In Quincy, Ermont is paying above market rate for the previously dilapidated 36,000-square-foot building...
Commercial real estate developers say they have never seen a change so swift in so many places at once. From Monterey, Calif., to Portland, Me., the new industry is reshaping once-blighted neighborhoods and sending property values soaring.
In some Denver neighborhoods, the average asking lease price for warehouse space jumped by more than 50 percent from 2010 to 2015, according to an industry report. In the city over all, there are five times as many retail pot stores as stand-alone Starbucks shops.

Thus neatly proving two points at once; a) legalising cannabis makes an area more attractive on the whole (so is a good thing) and b) a large chunk of the extra value generated by any business accrues to landowners.
Seeing as part of the reason for legalising is to save wasting taxpayers' money on enforcement and collect taxes from the product instead (win-win), if the government can also tap into those higher rental values via higher property tax receipts (as most US states do), it's a win-win-win.


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