With cannabis’ increasingly legal status, it was only a matter of time before real estate ads aimed at pot producers came out into the open in California. That time is here.
“Awesome Marijuana Farm For Sale in Mendocino County, California,” states a recent ad on Craigslist.
The 80-acre parcel, represented by Sonoma County real estate broker Rene Caro, is among the first California pot-producing properties to be advertised as such since voters in November passed Proposition 64, which legalized the recreational use of marijuana.
“At first I was scared to do it,” said Caro, who deals primarily with residential properties. But after last year’s vote, it seemed like a good time to “list it for what it is.”
Caro said a friend who works in marketing helped convince him.
“It was a marketing decision entirely,” Caro said, adding it took some time to convince the landowner to advertise the property for marijuana growing. The owner remains unwilling to be identified.
Openly advertising cannabis properties may be new to California, but it’s a trend that began several years ago in Colorado, Oregon and Washington that earlier legalized recreational pot use.
Websites like www.420property.com have multiple listings advertising the merits of their clients’ properties.
“The hard work is done. Now it is ready to make money ... lots of money,” states an ad for a Washington state property with an existing 33,000-square-foot cannabis growing operation that includes water, power, security devices, greenhouses and state approval.
“Perfect grow climate. Lots of room. Will and can produce more than 500 plants. The future worth of this licensed operation is in the 7 figure range,” boasts an ad for 21 acres in southwest Oregon.
The new openness in California has surprised some of the most seasoned real estate agents as well as long-time marijuana advocates and farmers.
“I didn’t think I’d see it this fast,” outspoken Mendocino County-based cannabis activist and grower Tim Blake said of the advertising. “Even for me, that’s a trip.”
Kevin Sullivan, a real estate agent who, with a partner, specializes in ranch properties in Mendocino and Humboldt counties said “it sort of blows you away. You’re just not used to people talking about it openly.”
The rush to buy land in the two counties has increased prices by about 30 percent to 40 percent in the last year or two, he said.
While the properties may be openly advertised to the cannabis industry, many property owners accustomed to decades of hiding their crops prefer staying in the shadows. Some are leery of the new openness because cannabis cultivation remains illegal under federal law. Others may not want friends and family to know, said Dana Wallace, a Bay Area real estate broker who last year began specializing in cannabis-related businesses and properties. She said she represents buyers and sellers from throughout the country.
“It’s still very hush hush,” Wallace said. Most of the ads on 420property.com that feature existing growing operations do not list addresses. Some sites devoted to pot property sales don’t list agents. Instead, written inquiries must be submitted.
Often, property owners want to meet real estate agents and potential buyers face to face before divulging exact locations of their land, said Wallace, who’s been in the real estate business 14 years. She made the decision to focus on marijuana-related properties and businesses last year as the demand increased.
“I get calls every day” from people seeking properties for cannabis businesses, she said. She’s actively looking for properties suitable for growing cannabis or manufacturing related products for some 20 to 30 clients.
Ukiah-area broker Dick Selzer believes openly advertising marijuana properties is risky — under federal law, property involved in such marijuana transactions could be seized by federal officials and sold off to a third party. Many rural land sales are owner-financed, like the $649,000 marijuana property Caro has listed.
While there’s a big demand for properties, Wallace said, “it’s not like all of these sell like hotcakes.”
Investors prefer properties with water, plenty of sun, flat land, infrastructure including irrigation and greenhouses, and, when available, pot-growing permits and licenses from state and local governments, she said. Buyers also prefer locations with good road access and that are not too remote, qualities that ease their product distribution.
“They have to meet a lot of criteria,” Wallace said. She said properties that are “turnkey,” allowing buyers to walk in and start operating, can sell for substantially more. On 420property.com, a 240-acre Humboldt County property with residences, greenhouses, ponds, multiple water tanks and county permits is listed at $8 million.
A 12-acre property in Washington state with two log homes, a greenhouse, fencing, and state and local cannabis licenses, is listed for $10 million. The owner, who identified himself only as Dr. Dale, said in a phone interview the price is about $8.5 million more than it would be without the licenses and amenities. Dale, who leases a portion of the property to a licensed cannabis cultivator, said the asking price is based on an amount he needs for a project he’s working on. There have been four inquiries on the property since he began advertising in January.
Dale said he’s not a marijuana advocate, but it’s legal in Washington and he feels it’s a safe and lucrative business.
“It’s just a business transaction. It’s a very good cash crop from what I can tell,” he said.
The value of any property depends on how much buyers are willing to pay, Wallace said.
Land in Mendocino and Humboldt counties is desirable because of their reputations for high-grade cultivation, she said, but areas like Monterey County and Southern California are among the most highly prized because of their near perfect growing weather.
Marijuana property transactions are complicated by a wide range of local and state regulations and are not sure bets.
“There is not one person that could sit down and tell you what all the rules will be. All the rules have not been set,” said Mendocino County Sheriff Tom Allman. He said the medical cannabis cultivation rules tentatively adopted this week by Mendocino County supervisors are unclear. They’re also not yet finalized.
As a result, people who prematurely jump into land purchases hoping to cash in on the current “green rush” could end up losing out if their land isn’t usable for pot production or worth what they paid.
That has created a bubble that could prove harmful over time, said Hezekiah Allen, executive director of the California Growers Association.
Not only does it price area residents out of the real estate market, it also means speculators could walk away from properties — some of them polluted by careless cultivation practices — when the bubble bursts, leaving taxpayers to clean up the mess, he said.
Mendocino County officials do not have a computer system to track land sale prices, but it’s clear that rural parcels in the northern part of the county — an area famous for its marijuana growing — are changing hands with increased frequency, said Assessor-Clerk-Recorder Susan Ranochak.
“There’s definitely been more vacant land sales” in 2016 compared with 2015, she said. Actual figures were not available.
You can reach Staff Writer Glenda Anderson at 707-462-6473 or email@example.com. On Twitter @MendoReporter.