Tower Commercial Forms New Cannabis Division

MIAMI—Prompted by strong cannabis-related retail and industrial deals in Florida, locally-based commercial brokerage firm Tower Commercial Real Estate has formed a new cannabis division within its tenant representation platform.

Tower CRE states that the launch of the new division was prompted by closing $50 million in cannabis-related retail and industrial transactions in the last 18 months with an additional $15 million in the pipeline that are expected to close by the end of this year.

The new cannabis division—being led by Tower CRE’s Senior managing director Scott Allen and senior director Rob Foster—is tackling every issue surrounding the cannabis real estate sector and navigating through the many barriers to entry faced by the cannabis sector, including a rigorous due-diligence process; in-depth understanding of zoning codes; municipal regulations, restrictions and processes; competitive landscape; market knowledge; legal review; and financing challenges.

Although it is being challenged, the State of Florida requires that cannabis companies be vertically integrated. Therefore, a company must be the cultivator, the processor and the point of dispensing, Tower CE officials state.

The firm is providing solutions for retail dispensary operations, industrial distribution centers, and cultivation centers, which include agricultural land, greenhouse and industrial space. The Tower CRE cannabis division works with specialized attorneys and project management teams to move each requirement through its development process.

In the past 18 months, Tower CRE has successfully closed transactions for 35 dispensaries throughout Florida. Among them are eight Liberty Health Sciences dispensaries, 14 Verano Holdings dispensaries, and 13 3 Boys Farms dispensaries.

Tower CRE has 12 more dispensaries in process throughout Florida and has established itself as the leading third-party real estate team for the cannabis sector within the state.

“Working with cannabis companies requires a different level of service, attention and an immense amount of time,” Foster says. “Through experiencing the pitfalls early on in our tenure, we have been able create and implement a process that is efficient and effective. We have a full team that navigates through each requirement from the infancy phase to move-in.”

He adds, “The number of transactions we have completed to date has allowed us to hone in on a precise formula to uncover new opportunities, and we have found tremendous success leading rapid expansionary efforts for our clients.”

Allen and Foster state that Florida has one of the best demographic scenarios for cannabis deals, as Florida has one of the fastest-growing medical marijuana programs in the nation. As of May 2, more than 213,000 people are enrolled, with 10,000-plus signing up every month.

Florida also has a large senior population, which is a major focus of license holders. In addition, not only does Florida require a cannabis company to be a complete vertical, but one license will allow them to open dispensaries throughout the state, which is very different than any other state, they note.

“With so many factors on our side, we foresee continued exponential growth and due to our notable successes and upcoming activity, we felt the time was right to officially launch this division,” Allen says.