- By Jeff Ostrowski Palm Beach Post Staff Writer
Palm Beach County is home to just two marijuana dispensaries for now, but cannabis companies have signed deals for at least three more locations in the county.
And perhaps two dozen pot shops could open for business in the county in the coming years.
“There’s going to be a flurry of activity,” said commercial real estate broker Chris Fleming of Strategic Realty Services.
Fleming has negotiated two leases for Trulieve, which has created the most extensive retail network among Florida’s 13 state-approved pot producers. One of Trulieve’s locations is on Woolbright Road near Interstate 95 in Boynton Beach, the other is on Military Trail in central Palm Beach County.
Another cannabis company, Grow Healthy, says it will open a dispensary at an undisclosed location in unincorporated Palm Beach County sometime during the third quarter of 2018. And Liberty Health Sciences also is scouting spots in Palm Beach County, Chief Executive George Scorsis said.
The typical dispensary takes just 2,000 to 3,000 square feet, so pot shops aren’t snapping up huge swaths of space.
Palm Beach County’s first two dispensaries, Knox Medical and Curaleaf, are located on Dixie Highway in Lake Worth, the city that has proven most welcoming to pot purveyors. Boynton Beach and Palm Beach County moved last year to allow dispensaries, and those municipalities are next in line for pot shops.
Other municipalities, such as Boca Raton and Palm Beach, have proven unwilling to allow dispensaries.
In addition to local rules, federal prohibition of pot looms large over the medical marijuana industry’s real estate decisions. Publicly traded real estate investment trusts steer clear of weed-related business. So do insurance companies, which are tightly regulated and own large portfolios of commercial real estate.
What’s more, many mortgage covenants forbid landlords from leasing to tenants that run afoul of federal law. And big-name retailers often have the right to nix unwanted neighbors within a shopping center.
As a result, Liberty Health Sciences’ Scorsis said he doesn’t bother to inquire about space in shopping centers filled with national merchants.
“We just know to stay away from those places,” Scorsis said.
That leaves a small universe of properties that can accommodate pot shops — typically, they’re owned by independent landlords who aren’t publicly traded and don’t have a mortgage. That description fits Trulieve’s landlord in Boynton Beach.
“The owner was a little reluctant, but it was kind of a no-brainer,” Fleming said.
Marijuana dispensaries don’t always drive a hard bargain in the way that other retail tenants do. While retailers are known for demanding concessions such as free rent during construction, Trulieve is paying for its space even while it’s under construction, Fleming said.
“At least for the time being, they’re pretty much a broker’s dream,” Fleming said.
Scorsis, who recently signed leases in Fort Lauderdale, Fort Myers and Port St. Lucie, said landlords are getting comfortable with the idea of renting space to marijuana businesses.
“You really are starting to get a larger level of acceptance from landlords,” Scorsis said. “We are de-stigmatizing the entire industry. We are seeing an acknowledgement of the legitimacy of the industry.”
Florida has granted licenses to 13 cannabis companies, and those firms are allowed to open up to 25 retail locations each statewide. That amounts to a potential for 325 pot shops throughout the state. If the stores are distributed according to population, Palm Beach County would have about two dozen of that total.
There’s more than 65 million square feet of retail space in Palm Beach County, so even two dozen new dispensaries would scarcely dent the overall market.
Pot shops are looking for space amid record-low vacancies. Palm Beach County’s retail vacancy rate was just 4.3 percent at the end of 2017, according to commercial real estate brokerage Colliers International.