by DAVID DISHMAN
Courtesy of www.newsok.com
Grow houses that produce marijuana are being built across Oklahoma, often in old industrial buildings, and the revival of the properties is adding to the economic boost being provided by pot.
“It’s leased up a ton of retail, it’s leased up a ton of warehouses and it’s helped our market,” said David Chapman, an associate professor of finance and real estate at the University of Central Oklahoma.
Marijuana growing is done primarily indoors where elements such as water, air flow and light can be managed.
Large warehouses help growers meet the increasing demand for medical pot. Some retailers also are choosing to grow their own marijuana, allowing them to control the supply chain from seed to potted plant to marketable pot.
Chelsey Davis, who owns Ziggyz, a retail pot store, purchased a 20,000-square-foot facility at 3321 E Reno in Del City in July to convert into a grow operation for his retail locations.
Davis said he purchased the property for $800,000 and invested nearly $2 million into the building in order to install both hydroponic and soil-based growth equipment. It’s a work in progress as more equipment continues to be installed, but plants already are producing bud.
“We’re paying taxes; we’re buying things; we’re employing people,” Davis said.
The property has seen four or five tenants in the past 20 years, according to Johnnie Overbay who owns the Reno Rod & Custom Supply business next door. Overbay is hopeful Ziggyz provides a stable business presence in the area.
“I’m looking forward to it and everything being OK,” Overbay said.
Ziggyz isn’t the only business implementing a growth operation into its business. Oklahoma City-based CBD Plus USA and Blue Collar Criminals are two more local companies with plans to operate grow facilities in the coming months.
However, this economic growth, specifically the real estate aspects, should be viewed with caution, according to Chapman. Marijuana remains a cash-heavy business, as pot is still an illegal substance under federal law and banks are restricted in their involvement with the industry. That has had an impact on the market.
“We think there will be a run for real estate because they can pay for the real estate in cash,” Chapman said.
That will be fine while businesses are still viable, according to Chapman, but the market eventually will cool even for the currently booming medical marijuana industry.
“You’re going to have landlords that are stuck with the space again,” Chapman said. “At the end of the day, these are businesses … If you don’t understand the fundamentals of business, you’re going to have a hard time. I think that’s the key to the whole thing.”