LOS ANGELES—In anticipation of the legalization of recreational marijuana in California this November and federal legalization in the near future, investors are beginning to develop strategies focused on the cannabis real estate as a new asset class. Real estate investors Mark Paul and Jeff McGuire have formed MJ Real Estate Investors, a new Beverly Hills-based investment group that will focus on cannabis-friendly commercial real estate assets leased to state regulatory compliant cannabis operators, GlobeSt.com reports exclusively.

“This wave is coming, and it is a tremendous opportunity. What is happening in November on the ballot initiative, not just in California, really represents major investment opportunity, and real estate is a big part of that opportunity,” Paul tells GlobeSt.com. “We believe that cannabis real estate is going to become its own asset class, although it might take a few years, and eventually it will become federally legal as well. When it does, we will have 500 companies in the space and major operators. Right now, it is relatively new, and this is a chance to get in on that wave on the ground floor.”

In its first acquisition, the firm has purchased five commercial properties leased to two separate state-licensed cannabis operators. The properties are located in Denver, CO and Portland, OR and total $11.9 million. MJ Real Estate made these purchases with equity investments from its investor pool. The portfolio includes two cultivation facilities and three medical/retail dispensaries. All properties are leased on a triple net basis.

MJ Real Estate was able to make these purchases, and is able to invest in this asset class, because of the regulatory clarity many states have developed, and which the company hopes California will develop. “We believe that California is going to be These states have set up an effective regulatory framework, with Colorado being number one,” McGuire tells GlobeSt.com. “Colorado is the model that California, we believe, is going to be the most similar to. This regulatory environment is the only way that we would get involved because we want to ensure that we are only operating in states with clear guidelines.”

MJ Real Estate Group plans to hold the properties for the long term. While they are only focusing on regulatory compliant operators, which, in California, are currently only medicinal operators, if recreational usage is legalized in November, it will open up even greater market opportunities. “You want to make sure that you have state-compliant operators, and it is very important that you have attorneys that know how to put these deals together,” says Paul, adding that there is an extremely varied field of tenants in this industry. “This is an emerging market.” Both Paul and McGuire believe that this will become a new asset class in the coming years as regulatory changes are passed and adopted at the state and federal levels.

LOS ANGELES—In anticipation of the legalization of recreational marijuana in California this November and federal legalization in the near future, investors are beginning to develop strategies focused on the cannabis real estate as a new asset class. Real estate investors Mark Paul and Jeff McGuire have formed MJ Real Estate Investors, a new Beverly Hills-based investment group that will focus on cannabis-friendly commercial real estate assets leased to state regulatory compliant cannabis operators, GlobeSt.com reports exclusively.

“This wave is coming, and it is a tremendous opportunity. What is happening in November on the ballot initiative, not just in California, really represents major investment opportunity, and real estate is a big part of that opportunity,” Paul tells GlobeSt.com. “We believe that cannabis real estate is going to become its own asset class, although it might take a few years, and eventually it will become federally legal as well. When it does, we will have 500 companies in the space and major operators. Right now, it is relatively new, and this is a chance to get in on that wave on the ground floor.”

In its first acquisition, the firm has purchased five commercial properties leased to two separate state-licensed cannabis operators. The properties are located in Denver, CO and Portland, OR and total $11.9 million. MJ Real Estate made these purchases with equity investments from its investor pool. The portfolio includes two cultivation facilities and three medical/retail dispensaries. All properties are leased on a triple net basis.

MJ Real Estate was able to make these purchases, and is able to invest in this asset class, because of the regulatory clarity many states have developed, and which the company hopes California will develop. “We believe that California is going to be These states have set up an effective regulatory framework, with Colorado being number one,” McGuire tells GlobeSt.com. “Colorado is the model that California, we believe, is going to be the most similar to. This regulatory environment is the only way that we would get involved because we want to ensure that we are only operating in states with clear guidelines.”

MJ Real Estate Group plans to hold the properties for the long term. While they are only focusing on regulatory compliant operators, which, in California, are currently only medicinal operators, if recreational usage is legalized in November, it will open up even greater market opportunities. “You want to make sure that you have state-compliant operators, and it is very important that you have attorneys that know how to put these deals together,” says Paul, adding that there is an extremely varied field of tenants in this industry. “This is an emerging market.” Both Paul and McGuire believe that this will become a new asset class in the coming years as regulatory changes are passed and adopted at the state and federal levels.