Risks and rewards of legalized marijuana for the construction industry

The legalization of cannabis — otherwise known as marijuana, in addition to a host of other terms — is a hot-button topic in U.S. politics. Currently, 25 U.S. states have cannabis-use laws on the books, with nine more taking the authorization for either medical or recreational use to the voters in November. Each state that has passed those laws operates in a swirl of its own regulations, all under the shadow of the federal government, which has maintained that marijuana is a Drug Enforcement Agency Schedule I drug, alongside heroin, LSD, ecstasy and peyote.

As laws permitting some use of marijuana continue to spread, the construction industry is left facing contrasting consequences: the positive effect on building demand and housing markets, and the negative effect of safety concerns on the job site.

Budding industry leads to construction boom
Attorney Lance Boldrey of Dykema Gossett told Dive that federal laws can work in favor of the construction industry. Because the business of marijuana cannot be conducted over state lines without risk of a felony charge for trafficking, dispensaries and growing operations must be maintained within the state.

In regions of the country that are limited to what they can grow outdoors because of the weather, this means an enormous increase in industrial construction. The projected need for indoor grow space in Michigan alone, he said, is somewhere between 1.5 and 2 million square feet. "Cities are looking at it as a redevelopment opportunity," Boldrey said.

In Denver, city officials reported in May that there was almost $2.5 billion worth of construction projects either in the planning stages or underway — a building boom partially sparked by the legalization of recreational cannabis. In 2015, marijuana boosted state incomes by $253 million and took over an estimated 4 million acres of grow space, which includes industrial parks throughout the Denver area. Once home to artists and small businesses, a sort of pot gentrification has spread through these formerly low-cost areas, displacing those who couldn't afford the rent.

Marijuana-based businesses — and the people they bring on as employees — also have put pressure on the housing market and driven up home prices to the tune of double-digit increases in Denver. The result? More demand for single-family and multifamily construction.

Architecture and design firms have even seen a payoff from legal cannabis operations. Last November, The McBride Company — the same group that is part of the creative force behind The Walt Disney Company and Universal Studios — revealed its designs for Pineapple Express, a chain of cannabis retail stores. With its "Mystic Pineapple" at center stage — or center store — Pineapple Express founders said in a release that they are ready to "modernize the legal cannabis industry."

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