High Times: Local Realtors become leaders in commercial properties for cannabis
When Ian and Melisa Bertram switched careers to real estate, marijuana was legalized in Michigan. Recognizing the potential opportunities, they dove in, and now it’s a homegrown business success story.
“When the city opted to allow provisioning centers in the same month (that the two received their licenses), we decided to go into it,” said Melisa Bertram, a former nurse.
Two and a half years later, the couple and their Real Estate One team have established a reputation in the area and throughout the state for selling and/or procuring properties specific to the needs of the burgeoning industry, whether retail stores or growing or processing facilities.
The couple’s decision to focus on cannabis real estate hit close to home: Ian had struggled for years with chronic pain and Melisa had looked into the possibility of medical marijuana to help ease it.
It also helped that their interest and family circumstances aligned.
“I always wanted to get into real estate,” said Ian, who formerly owned pizzerias. “As our children got older, my wife and I decided to do it as a team.”
While real estate in general can be complex, as agents negotiate a world of rules and regulations, finance and zoning, the ins and outs of dealing with a newly legalized industry were even more challenging.
The Bertrams familiarized themselves with local and state ordinances, what was allowed and where, the need for buffers between cannabis facilities and schools and churches, and overcoming hurdles and resistance among neighbors, governmental units and the general public.
“We did our due diligence,” said Melisa.
The National Association of Realtors reports that where cannabis has been legal for more than three years, the demand for commercial property has increased. That’s been true locally. A December 2019 Traverse City Business News reported that commercial properties near the city’s center were selling above their previous market value. Most were cash offers, as most local banks do not finance marijuana businesses.
“Once Traverse City rolled out (its plans), some of the biggest players reached out,” said Ian, pointing to companies such as Puff, Cloud and Gage Cannabis Company. “We helped all three secure locations in Traverse City.”
That led to additional opportunities, he says.
“Once we got the three in Traverse City, Kalkaska reached out to us,” said Ian.
Melisa says that once the larger communities opted in, smaller communities took notice.
“The smaller ones were sitting back,” she said. “Now they’re considering opting in.”
The Bertrams said the increasing demand has led to bigger payouts for their clients interested in selling commercial property. Ian noted that property in Kalkaska was selling for about $2,000 an acre. They were able to get one of their clients there $150,000 for one acre.
Among the challenges is the fact there is no overriding regulatory board for the cannabis industry. Different municipalities write their own rules, meaning townships next to one another may have completely different ordinances.
The Bertrams say that many have changed their stances over time, as the industry has become more accepted socially.
“We’ve spent many hours at meetings” explaining the processes and how it can create jobs, said Ian.
The Bertrams work with clients across the region and across the state. They said many of those interested in getting into the industry would prefer to be located downstate, where the population is larger and transportation is easier. But the cost of real estate is so much higher that many end up looking north.
“The majority want to be in Detroit, but the (real estate) price point is two or three times what it is here,” said Melisa. “Banks are not lending, so they have to be cash or do a land contract.”
The two anticipate that more such entrepreneurs will begin moving north as prices continue to escalate downstate and more communities in northern Michigan become open to the idea.
As those looking to get in the business have to renew their licenses each year, the longer they wait, the more money they will spend without bringing in any income.
“The shift to move north has taken longer than I thought it would,” said Melisa.
While they are still affiliated with the Traverse City office of Real Estate One and the rest of their team (three other Realtors) is still based at the 511 East Front St. office, the pair has moved to Gaylord.
They are working with an industrial park in the city and the couple – who say they drove more than 50,000 miles last year – says that I-75 offers them much-needed quick downstate access.
“It’s easier to get to Saginaw, Roseville – Gaylord is in northern Michigan but still one of the larger cities,” said Melisa. “We had been attending Gaylord planning meetings. The city had opted out but we heard from community members that they wanted it. They saw the success other communities had had.”
The two anticipate continued growth in the industry in this area.
“It’s a legitimate (business), it’s not stigmatized, not looked down on,” said Ian.
Even though so many businesses are hurting for workers, from restaurants to retail, the Bertrams said that’s not been the case for the cannabis industry.
Ian said the starting wages average around $15 per hour, often with benefits such as insurance and a 401K.
“As far as I know, it’s not been difficult to find employees,” said Melisa. “The younger people want the street cred to say they work there.”