By Josh Hall (Twitter: @Vancan19)

Market for retail space fires up ahead of pot legalization

Jun 7, 2018 | 11:50 AM

With marijuana set to be legalized in Canada, the market for retail office space has lit up big time in Red Deer.

Jeremy Makila with RE/MAX Commercial in Red Deer says businesspeople are coming from far and wide to snatch up what’s currently available with the hopes of opening up a retail cannabis store.

“You’re seeing some spaces leased up that likely would’ve sat a bit longer if it weren’t for this almost artificial rush. There are no new industries that come out that would cause this. To have an influx like this is very artificial in the market,” he says.

“For local owners, it just means there’s going to be less vacancy, increased interest, and it helps stabilize rental rates, which for owners is good. For other businesses that are struggling, it does push the rates a bit higher.”

The other problem, he says, is with the regulations municipalities like The City of Red Deer have set out, which include mandatory 300 metre separations between pot shops and other uses such as daycares, or just other pot shops.

ANNUAL LIGHT THE HOUSE EVENT

Ronald McDonald House lights up with holiday cheer for 2024

13h ago

enviro container

Red Deer-area company fined $12,000 for Water Act violation

16h ago

work already underway

Wetlands projects in Ponoka County and Red Deer get provincial funding

17h ago

As was stated by business owners at a public hearing this spring, these separations could push out daycares, a use Makila notes is typically very much welcomed by the community at large.

He’s also concerned that with The City likely to take development permits on a first come, first serve ‘down to the minute’ basis when pot becomes legal, it could turn nasty at City Hall.

“I think you’re going to have a line-up of people camping out at City Hall racing to be the first up to the desk,” he says. “You’re literally going to have people fighting to get up an elevator, fighting because one will get a license and one won’t.”

City Planning Manager Emily Damberger says they are preparing for all scenarios.

“The AGLC has a list of the applications that are being applied for in the city, so we know there are currently approximately 12 who have applied,” she says. “Part of the requirement for the development permit application is for applicants to submit their eligibility from AGLC, as in they’ve passed their criminal record checks.”

Damberger also says if a prospective daycare operator is comfortable, they can apply to The City for a variance, which would allow them to be closer than 300 metres from a cannabis store.

Meanwhile, Makila estimates each commercial realtor in the city has fielded 50-100 calls from people locally and across Canada searching for space. He says this phenomenon will make it hard for local entrepreneurs to flourish, while those with deep pockets gain the upper-hand.

“They’ve had to put up 10, 20, or 30 thousand dollar deposits as well as guarantee the leases knowing they may not be able to open a business. If there’s another application within 300 metres, only one of those businesses will go in there,” he says. “You have a lot of people risking very large amounts of money. So suddenly a bunch of the stuff that looked like it was leased is going to flood back onto the market.”

The Canadian Senate is set to vote on cannabis legalization on Thursday (June 7).