Rendering of planned We Grow CA facility.
We Grow CA is on track to open Sacramento ' s first cannabis campus— the highlighted area outlines its 250,000 square feet of space located on Elder Creek Road in the Power Inn district.
photo: eli margetich, rendering: courtesy of we grow ca
percent of counties have outright banned commercial cannabis in any form in unincorporated areas.
“ If I could describe the city’ s approach to cannabis, it’ s been one of pragmatism,” says Joe Devlin, Sacramento’ s inaugural chief of cannabis policy and enforcement.“ There was a cannabis community before we started regulating, and the approach / belief was that the best way to make sure it’ s safe for our consumers was to make sure that it was regulated.”
With so many cannabis entrepreneurs converging on Sacramento, a commercial property in the City’ s approved green zones that includes ample power( the average commercial grow facility uses 60-80 watts of electricity per square foot, to an average facility’ s 5-10 watts), and proper setbacks( including a 600-foot buffer from schools and parks) could command an additional $ 20- $ 30 per square foot above the already inflated prices, says Jay Richter, vice president with Sacramento’ s Kidder Mathews. If the property already has a conditional use permit( CUP), it could fetch an added premium of up to $ 200 per square foot.
The high demand for conforming green-zone properties means high demand overall, driving up the value of nonconforming properties as well. That’ s a real problem for other commercial tenants who are being priced out of the market.
Tracey Schaal is the executive director for the Power Inn Alliance, which represents 11,000 property owners in southeast Sacramento. The Power Inn area has drawn the largest concentration of commercial cannabis operators primarily because of its abundance of industrial space, central location, strong transportation access and a cost-effective electrical provider in SMUD.
Prior to the cannabis real-estate boom, the Power Inn district had a vacancy rate of 8 percent. That’ s now plunged to 2 percent, which Schaal says is unhealthy for an industrial area and is displacing non-cannabis businesses.“ Other industries either can’ t find space, or if they can, they can’ t afford it,” she says.“ Diversity is the key to any successful economy, so we don’ t want existing businesses to be displaced, and this is happening all over the district.”
Danny Deane has run a furniture manufacturing business in the Power Inn district for five years, but is now being pushed out.“ There is nothing available at a reasonable cost for someone like me in manufacturing,” he says.“ We can’ t afford to pay rates like this to stay in California.” Deane must now balance the cost of a move and replacing his current workforce( he’ s considering relocating to Reno), with the long-term costs of staying.“ It’ s a very difficult decision for me to make.”
The district’ s concentration of cannabis prompted the Power Inn Alliance to request a cap from the City of Sacramento on the number of cannabis businesses allowed to operate within its borders. In May, the Sacramento City Council voted to cap
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