Most investors are familiar with the traditional ways to invest in real estate. Tried-and-true property classes like purchasing an income-producing office building or a multifamily unit have well-known risk and return profiles. That makes them easily understood investment opportunities for beginning investors.
However, there are many other ways to invest in real estate, including a few weirder options. One of the more unusual methods is medical-use cannabis facilities. Here’s a look at this emerging property class, which overlaps the healthcare, industrial, and farmland real estate sectors.
What are medical-use cannabis facilities?
Medical use cannabis, or medical marijuana, was first legalized in California in 1996. Many other states have legalized it in the years since then, with the count currently at 33 plus the District of Columbia. They’ve authorized it to treat several conditions, including cancer, epilepsy, Crohn’s disease, and PTSD.
The marijuana plant contains more than 100 different chemicals known as cannabinoids that each have a different effect on the body. The most widely used ones for medical purposes are Delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD).
The medical marijuana industry needs these chemicals so that they can produce drugs and other treatment options. This supply must come from state-licensed growing facilities, which often include industrial buildings and enclosed greenhouses, so they can safely grow the plants and extract the cannabinoids for medical-use cannabis companies.
How to invest in medical-use cannabis facilities
There are two ways to invest in medical-use cannabis facilities:
Direct investment in developing or acquiring a medical