SVN | Saunders Ralston Dantzler Associate Advisor, Josh Sheppard, primarily operates in and throughout the South Florida market. In this episode, Josh shares his expertise in the areas of commercial development and the intricacies of Florida’s marijuana commercial real estate industry.
Below is an excerpt from the interview. Listen above for the full podcast.
What do you do at SVN | SRD? Well I have been here about a year and a half, almost two years. Before I started, I dabbled in residential, but I actually started here on the land side. Now I'm starting to dabble in the retail side of things. That's particularly because I'm working with a few dispensary companies and those who are looking for commercial development sites.
Where are you located? I am all the way south. I think I'm the furthest south agent here. Living in South Florida, I try to cover the Everglades and between Southeast and Southwest Florida. There's a road called “Alligator Alley”, it takes about an hour [from Lakeland].
Is there much property for sale in the Everglades? Yes and no. Obviously, there's a huge chunk of the state that's untouchable; that’s the Everglades. So, you really have these corridors where on one end, you're bordered by the Everglades and the other end, it's the ocean. It is a good thing and a bad thing. There's only a limited supply of land down there. Certain counties like Broward really don't have any land left. There's essentially one large acreage parcel. I think it's probably 767 acres and he's already sold off a couple pieces to some of the larger national developers. It'll probably go at some point in the future.
Then there’s Miami. People think of Miami as a big beach city. It’s got its big downtown area, but Miami might as well be its own small state. It is humongous. The counties are huge. On the southwest side of Miami, you have a homestead. Then you have the Redlands, Hialeah, and Kendall. There is a lot of land out there.
The urban service boundaries are all east. Everyone wants to be by the ocean, right? The further east you go, the more expensive things are. There is a lot of opportunity in Palm Beach, quite a bit of ag land. The Department of Agriculture does an Ag Census every five years. The two largest counties in the state are actually Miami Dade and Palm Beach.
What type of properties do you look for? Since I started here, I’ve wanted to get a feel for different types of properties. Initially, I started in land, looking at a lot of residential development pieces. I don't operate a lot within the actual farm space. I’ll work in industrial. I'll work in ranch and recreation. Most recently, I've been involved in the nursery cultivation side of things, which has now led me into looking at the retail side.
Is cannabis illegal? It is a very convoluted and interesting space right now. State-by-state, it is drastically different. Federally, it's not recognized as a legal substance right now, but predominantly, people say it will be at some point in the future. The part that changes is the timeline.
When it's federally illegal, that presents a lot of issues when it comes to banking, insurance, and different things. So, there is a medicinal use for it. That's where we're at right now with Florida. In the nation, there are 39 states that medically have [cannabis] legalized and 19 states that have it recreationally legalized. When it comes to Florida, it's just medically legal. So if you need to use cannabis, you would get a doctor's prescription, and then you can go to the dispensary site.
It's a gray area when you get on the federal topic. But in Florida, it's pretty cut and dry. Florida has done a really good job so far at saying “this is what's allowed, this is what we're doing”.
How do you open a dispensary? You have to have a MMTC license. That stands for Medical Marijuana Treatment Center. There's 22 of those that have been issued in the state of Florida. They're all vertically integrated, which means we don't have somebody who's cultivating and then wholesaling to a dispensary. If you have a license, you are the only party that's allowed to grow it and sell it, which is very valuable. They say, arguably, that Florida is one of the most valuable licenses in any state. I think that the starting bid for a license right now is somewhere in the range of $40-50 million now. Just recently, a company called MedMen sold out to another organization, they acquired all of their holdings to license everything for a $63 million acquisition.
What are your predictions? I think times are changing. I don't imagine there'd be more than 10-15 dispensaries in a city, but people are trying to stake their flag, so to speak
It's an interesting space. I'm a believer that we're in the midst of what the Prohibition was like back in the day. If you look at the polls, I think the majority of voters don't really have any sort of objection towards the use of marijuana. It's like alcohol. I think that in the future, what you're gonna see is that it's just going to become a substance that will be regulated. Obviously, just like alcohol, you’ll have to be of a certain age to buy it and things like that. Our kids are going to be looking at it like we're looking at the prohibition. So it's exciting to be at the tip of the spear for that.
What are your goals? We’re kind of in the turning of the market. It's been really cool and exciting to learn about it because it's a new industry. We'll see how things pan out with it. I don't think that the medical space is going to go away at this point, but it has the opportunity to grow even more. So, I'm going to pursue it and see if I can't stick my own flags.
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