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INVESTING 101 EDUCATION

Growing CBD Demand Impacting Real Estate

Ever since the passing of the Farm Bill of 2018, the CBD industry has blossomed. While CBD had been under scrutiny by the government previously, it had never before been legalized for mass consumption. Now that regulation hurdles have been jumped, CBD, aka cannabidiol, is being added to everything from gummies to breath strips; from lotions to our favorite beverages. Even Coco-Cola is considering introducing a CBD-infused beverage to its line of sodas.

The Public Wants More CBD

Demand for CBD is growing exponentially. Almost everywhere you look, retailers are stocking CBD products in response to requests from their customers. You can now find some form of CBD in gas stations, health food stores, supermarkets, and even in your veterinarian’s office. CBD’s benefits for pets have been widely disseminated by pet owners, although veterinarians themselves have been slower to substantiate the benefits. Many do stock CBD-infused pet products, though, simply due to consumer demand.

What Are The Benefits of CBD?

The touted benefits of CBD range from relief from anxiety, minimized epileptic seizures, help with sleep, relief from joint pain, help with macular degeneration and much more. The scientific community is struggling to keep up with all the claims while study after study comes in proving that CBD has medicinal use. In fact, at least one pharmaceutical drug lists cannabidiol as one of its main ingredients.

Does CBD Make You High?

One of the biggest confusions about CBD is thinking that it gets you high. This is likely due to to the similarity between the words cannabidiol and cannabis. Cannabis is a word used for marijuana, but it’s actually just a word that describes the cannabis genus of plants, of which hemp is one species, the Cannabis sativa L. Marijuana contains a compound called THC, which is responsible for that high feeling associated with marijuana use. Hemp contains a compound called cannabidiol, with does not get you high. To be clear, using CBD or any products containing CBD does not get the user high.

How is CBD produced?

CBD-infused products and CBD oil are produced from the hemp plant, an agricultural crop. Hemp is grown on farms, the same as other crops like corn or soybeans. When the hemp is ready to harvest, typically around October in the U.S., it may be processed to create biomass or dried to extract the oil to make CBD oil.

How is the Real Estate Industry Impacted by the Growing Demand for CBD?

This is the exciting part for real estate investors. Due to the increased demand for CBD products, farmers are under pressure to produce more hemp crops. Of course, they need land to do that. Once the crop is ready for harvest, manufacturing facilities are needed to do the production stage for CBD-infused products and for CBD oil. These are both land intensive operations; first the growing, then the manufacturing. Therefore, there is a growing demand, not only for the CBD itself, but also for the land and the facilities to process the biomass. This demand has led to many more investment opportunities for those interested in real estate. There are many ways to get in on these CBD-related opportunities.

Private Lending on Processing Facilities

First, there are private money lending opportunities for the processing side of the CBD industry. At American Real Estate Investments, we have one such opportunity currently, for our facility in Denver. Other CBD-related processing opportunities exist at other companies as well. With private money lending,  you act as the bank, lending money and getting a pre-determined payout on a regular basis, often with double-digit returns.

Land Investments

If you want to get in on the growing side of the CBD industry, you can invest in farmland. You could buy farmland for growing hemp and lease it to a farmer who can’t afford to buy the land himself. Or you could buy an existing farm and take a percentage of the profits for yourself.

Commercial Retail Investments

As mentioned earlier, CBD products are flying off the shelves. CBD retailers are eager to set up shop in commercial spaces around the country. Commercial retail space has never been so popular. You could buy commercial space and lease it to a CBD retailer whom you know is going to have plenty of business to pay your rent.

The CBD industry has been likened to the next gold rush. It’s already upon us. The time is now to get started in this growing market. If you’d like more information about private money lending opportunities with CBD, please get in touch today. The earlier you get started investing, the more money you stand to make.