Shopping center owners left with empty storefronts after pandemic-induced retail exodus, customers unlikely to fill gaping holes in their malls: pot dispensaries.
“It’s not 22-year-olds who are buying a blunt and sitting on curbs,” said Bill Schrader, owner of Alamo, Texas-based retail real estate company Austin Group. “You’ll be shocked when you walk into the dispensaries. The store is a cross between an Apple Store and Nordstrom.”
Now, where an empty Sprint store once stood at the Union Landing Shopping Center in Union City, California, frosted glass windows hide a sophisticated marble-tiled airy shop, the city’s first Cannabis Shopping Center store, located in California. Run by Salinas. Retailer Grupo Floor.
Customers are greeted by a concierge to answer questions, sign in, and place orders via iPad. Orders are assembled out of sight and packed in a bag that looks like it came from Tiffany’s. The store itself resembles a high-end department store with glass counters, high ceilings, and a security guard.
“It’s not a dispensary, in my opinion,” said Schrader, who leased the space. “It’s retail.”
Cities and towns responsible for licensing cannabis typically restrict marijuana stores, or dispensaries, from protected locations such as churches, schools, or community centers to low-traffic industrial areas. But since states began legalizing marijuana for recreational purposes and CBD was federally legalized in 2018, weed has gone mainstream in retail. Neiman Marcus sells $155 CBD oil, Barneys New York offers a $1,100 hand-blown glass bong and a $1,400 weed grinder. CBD skin care company Seventh Sense has stores in the mall owned by Simon Property Group, the country’s largest mall owner.
As other states move to legalize marijuana and federal lawmakers consider a bill to decriminalize weed, pot is poised to become a mainstay in retail, says Stephanie Segilski, International Council of Shopping Centers, said the vice president of research with a trade organization.
“If it is cleared of crime, it will change the game and landlords will have to think about it,” she said. “There’s a lot of change coming.”
This is good news for the brick-and-mortar retail industry, which has been marked by consumers shifting most of their spending to online stores and a growing preference for services over goods. Over the years, Union Landing has lost a handful of anchor stores, such as Party City and Sports Authority, when they went bankrupt or significantly reduced their real estate footprints. Its sales tax revenue declined 45 percent from 2019 to 2020 as the pandemic crushed brick-and-mortar purchases, according to a March retail and zoning study commissioned by Union City.
Cannabis retailers can bring in higher rents and better foot traffic, said Miklos Campuzano, managing director of Cannabis Real Estate Consultants. The company’s co-founder Mike Bitter told Granthshala News in an email that Grupo Floor estimates its Union Lending dispensary, which is already seeing an average of 500 customers a day, will be able to generate gross sales in its first year of business. would bring in $1.15 million.
While state or local caps on the number of dispensary licenses have created stiff competition—fares have nearly doubled in some cases—the stores have so much traffic that they can largely absorb large outflows.
“These businesses are rapidly generating revenue,” Campuzano said. “You can assure yourself that you can pay these higher rents because you can generate cash earlier.”
In Missouri, the Department of Health said it would issue only 192 licenses for dispensaries in the state. In Arizona, one dispensary license is permitted for every 10 pharmacies in the state, with at least one cannabis store permitted in each of the state’s 15 counties.
Campasano said the tight real estate market is good news for landlords, who may collect higher rents from cannabis retailers as space for marijuana sales is limited and stores quickly begin churning out higher sales.
This is also positive for local municipalities. According to Mayor Carol Dutta-Varnassi, Union City estimates the store will bring in $250,000 to $500,000 in annual tax revenue.
“There was a concern because this center was built 20 years ago, and of course businesses come and go,” she said. “Certainly it’s seen as a way to revitalize the center, because as people are showing up, you’ll have foot traffic to other facilities.”
But pot dispensaries still don’t have the security and total buy-in from people exposed to a drug that’s still illegal at the federal level. Union City Council member Gary Singh, Grupo Floor’s sole opposition vote to the union’s landing license, told Granthshala News in an email that the dispensary could pose a risk to children who use marijuana before they can be legalized. be allowed to buy it from
“If there’s a store in your city, young people are more likely to try it,” he said. “Having a store in a shopping center has a lot of risk for this. I believe there is a better way to balance the budget.”
People under the age of 21 are not allowed in Grupo Floor’s store. Grupo Floor CEO Gavin Kogan said customers will need to present their identity at the entrance before entering. He said he would have to re-present his ID to complete the purchase to ensure that the buyer was the same person who entered.
“We do not introduce cannabis to communities; Bhang is already there in all communities,” he said. “We introduce regulated, safe and taxable cannabis into communities.”
Other concerns of community members include safety concerns, as dispensaries are largely cash-only. Marijuana is still illegal at the federal level, with financial institutions prohibited from providing services to businesses that sell marijuana. This has made only a few banks willing to do business with pottery dispensaries.
“They have to give extra security because there’s so much cash around,” Segilski said. “It gives you pause.”
Union City economic development manager Gloria Ortega said the city is “proud to be on the cutting edge this time.”
Of the city’s decision to approve Grupo Floor’s license, she said, “It really wasn’t an act of desperation.” “There was this realization that cannabis is here to stay.”
Credit: www.nbcnews.com /