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US (CA): Marijuana to replace flowers?

Itís the Gold Rush all over again in California, except this time the prize is cannabis. With the passage of Proposition 64, passed by the California state legislature in November 2016, speculators have invaded California at a speed similar to whiteflies on gerberas. Prop. 64 legalizes adult recreational use of marijuana and includes provisions for cultivation, provided local jurisdictions sign off. In passing the law, California joined the ranks of eight states and Washington, D.C. that have legalized recreational marijuana. In total, 29 states, D.C., Puerto Rico and Guam have legalized medical marijuana.

In Colorado, Massachusetts and Oregon, cannabis cultivation has fueled a real estate boom in dilapidated warehouses, unused factories and abandoned self-storage operations, the kinds of properties that easily retrofit to growing facilities. Despite the multimillion dollar renovation price, cannabis growers like these spaces because theyíre private, easy to secure and adapt readily to climate control. But flower farmers know that energy costs quickly add up in enclosed production settings, and even with careful retrofits, the original structures werenít meant for high humidity, which can lead to expensive mold remediation.

Thatís where California comes in. Cannabis growers and their investors are eyeing the Golden Stateís agriculturally zoned land, including places such as the Salinas Valley.

In a land management effort aimed at breathing fresh life into abandoned flower farms while curtailing the number of new construction permits for cannabis operations, Monterey County passed an ordinance that cannabis cultivation can occur solely in existing greenhouses on existing farmland. Price per acre has doubled over the course of the last year, according to commercial broker Keller Williams Realty. In 2015, a 10-acre parcel with greenhouses listed for $2.5 million; in 2017, the same parcel lists at $5 million.

On the face of it, marijuana could take a bite out of flower production acreage. ďAnyone with a structure like a greenhouse is in a good position to sell to a cannabis group,Ē said Kasey Cronquist, PFCI, CEO of the California Cut Flower Commission. His group collects floral sales reports on a quarterly basis. So far, they havenít seen significant changes in the numbers.


Publication date: 8/9/2017



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