Edmonton, Kelowna deemed commercial real estate ‘hot spots’ for cannabis industry

Western Canada is expected to see a considerable increase in retail and industrial sales post-legalization, says report

By
Western Investor
October 11, 2018






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Aurora Cannabis is building an 800,000-square-foot marijuana production plant near the Edmonton airport. | Equities

 

Cannabis companies are expected to lead demand for commercial real estate in Kelowna and Edmonton following marijuana legalization, according to a new report.

The Western Canadian cities are already seeing a significant amount of interest in retail spaces and production facilities, RE/MAX’s Commercial Investor Report 2018 states. 

Kelowna posted an 8 per cent decrease in commercial sales total sales value year-over-year. That decrease isn’t expected to last, as the city has identified over 900 potential dispensary locations to be approved for licenses post-legalization. Retail prices are expected to rise as cannabis companies compete for space.

 “The upcoming legalization of cannabis is continuing to have a major impact on the commercial real estate market this year,” says Elton Ash, regional executive vice-president, RE/MAX of Western Canada. “In Kelowna and Edmonton, the cannabis industry is slowly absorbing the existing industrial spaces and development lands, which has contributed to the rise in lease rates for those areas.”

A 800,000-square-foot facility in under construction by Aurora Cannabis in Greater Edmonton’s Leduc County has already contributed to a positive growth in commercial sales in the city. Sales are up 50 per cent since 2016, totaling $1 billion. Industrial vacancy lowered to 5 per cent during the second quarter of 2018. Retail and office sales in the region have also began to pick up as legalization nears, with more than $500 million worth of completed transactions slated for the third quarter of 2018.  


Tanya is a recent graduate of Langara College's journalism program and spent a summer freelancing for The Burnaby NOW and The Record, following a reporting internship with the publications. She joins Western Investor as an editorial assistant. Very much a millennial, she sees the irony in writing about real estate she will likely never be able to afford.
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