Kelowna a pot 'hot spot'

UPDATE: 4:34 p.m.

Re/Max believes Kelowna is one of two Canadian commercial real estate “hot spots” when it comes to cannabis, but Kelowna community planning department manager Ryan Smith still wants a slow, deliberate process to determine who can sell recreational marijuana.

The Re/Max report indicated there are more than 900 properties in Kelowna where rezoning for recreational marijuana sales is possible, but that doesn’t mean there are going to be that many businesses selling cannabis.

“As rezonings start to happen, because of the setbacks that are required between retail stores – 500 metres – that number will start to drop pretty quickly,” Smith said. “So it seems like a big number, but it’s really not.

“There’s lots of commercial properties that are out there that are a potential right off the bat, but as soon as we approve one downtown that might preclude 80 other properties.”

Smith said the city is currently communicating with “dozens” of potential applicants but has yet to receive an official rezoning application. Businesses have until the end of November to submit their proposals, and the best ones will be approved, not the first ones into the pile.

“Getting the best result from this Canada-wide change is the goal and making sure there is good public safety and that we get tasteful, high-quality businesses moving to Kelowna or opening in Kelowna,” Smith said. “That’s the goal, rather than allowing a free-for-all to happen.”

ORIGINAL: 11:50 a.m.

Two cities in Western Canada have been named the next commercial real estate "hot spots" for the cannabis market, according to a report.

Real estate firm Re/Max Commercial says that Kelowna and Edmonton are both expected to see positive commercial growth in the coming months as a result of cannabis legalization.

Prices for commercial real estate in the southern B.C. city are anticipated to see an uptick, as approval for cannabis retail licences will be "extremely competitive" amid high demand once the substance becomes available.

Kelowna has already identified more than 900 potential zoned sites for dispensaries.

Lease rates for industrial spaces in the area are also expected to rise as marijuana companies vie for more space to house their operations, says the annual Commercial Investor report.

This increase comes after Kelowna's real estate market saw an eight per cent decrease in total sales value for its commercial property year over year.

Meanwhile, it is anticipated that vacancy rates will continue to drop and lease rates will rise moderately for the remainder of the year in Edmonton thanks to the arrival of Aurora Cannabis.

New construction, particularly in the Leduc and Nisku areas of the city, has been burgeoning amid the addition of a 74,322 square metre (800,000 square foot) medical marijuana production facility and a 37,161 square metre (400,000 square foot) auto parts and distribution warehouse from Ford Canada.

"Cannabis is adding an additional demand segment to the overall market, for industrial or retail," said Elton Ash, regional executive vice-president at Re/Max of Western Canada on Wednesday.

"It's good news from a landlord perspective."

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