By: Dan Tausk, Principal, Mid-America Real Estate Corporation
While cannabis dispensaries are deemed “essential services” and allowed to remain open here in Illinois, the disruption to a fast-moving industry cannot be underestimated. From a positive perspective, cannabis will most definitely be an aid to this damaging and scary virus’ spread, either simply by helping calm folks’ stress, anxiety and depression stemming from all the uncertainty, to continuing to treat existing patients with already compromised immune systems.
Sales were booming in January and February in Illinois with a $40 million initial adult-use month followed by a $35 million second-30 days. Obviously, March will be impacted as shortages are now coupled with limited access and even sporadic store closings based on circumstances. Illinois currently does not allow delivery but has made temporary arrangements for “curbside pickup” especially providing for unencumbered access for patients. So, we have limited outlets, with limited supply on hand and now limited access – not an ideal situation but still a viable, relevant and useful retailer in the current environment.
Meantime, expansion of the industry cannot afford any delays due to work disruption. Almost 50+ additional “second site” dispensaries are well underway and either seeking zoning approvals or building out. Illinois patient sign ups have increased dramatically in last six months finally surpassing 100,000 and adult-use sales have been strong and tax generating for the state (well beyond projections). 75 more licenses are “in the que” for processing after applying earlier in the year with a May 1st deadline for issuance of the “winners” licenses from the state … many of those sites, too, have been identifying and tying up real estate in advance. 40 additional craft growing licenses are also now in process based on the recent deadline for applications. It seems even with Illinois’ current “shelter-in-place” order, construction can continue as a vital cog in the economy for now.
The cannabis industry, as I previously estimated, could create as much as 1.5 million square feet of absorption in retail space over the next three to four years and was arguably more impactful than any concepts giants such as Target, Walmart or Amazon would roll out in this timeframe. With COVID-19’s effect on jobs, tax revenue, and health, the cannabis expansion train must keep moving ahead for the good of politicians, patients, caregivers and families going through unprecedented times… albeit with a lot of debris on the tracks for all to help clear.