Landlords of outdoor shopping centers—especially those with loads of closed stand-alone restaurants—may want to develop some contacts in the cannabis dispensary business.
As the president and co-founder of Cresco Labs, Joe Caltabiano encountered leasing obstacles for the company’s Sunnyside cannabis dispensaries in top shopping centers. Age-old cultural stereotypes and the cannabis industry’s inability to accept credit card payments had usually eager leasing agents not returning his phone calls.
The COVID-19 pandemic has changed all that, said Caltabiano, now a consultant in the cannabis industry.
“Before, if we wanted to go into an established center, it would be, ‘No, J.C. Penney doesn’t want a cannabis business here,’” Caltabiano said. “Now the department stores and big-box retailers are falling out and you’re seeing cannabis becoming essential businesses and taking up larger footprints in established centers.”
The COVID-19 has made cannabis stores even more attractive to landlords lucky to be collecting half of their rents in May, he maintained.
“Long lines at cannabis dispensaries during the pandemic showed how strongly consumers view cannabis as vital to their well-being. The coronavirus has illustrated how the cannabis economy is fundamentally different than what many landlords may have previously thought,” Caltabiano said.
He thinks cannabis retailers would be just the kind of renters retail landlords would cherish at the present time. “We don’t push as hard on rental prices if we can gain access to a good location. We’re happy to be able to rent spaces that wouldn’t have been available to us before.”
Of course, government approval is required for cannabis dispensaries to locate in states and cities, but Caltabiano thinks the pandemic could change some minds about accepting the industry.
“Towns are going to be looking at big losses in taxes with the pandemic. In Illinois, 3% of cannabis revenues go to the municipality and the state gets its cut,” he said. “There’s likely to be a lot of dark retail real estate in this crisis, and cannabis can fill it in.”