Colorado Real Estate Journal - September 16, 2015
It’s a bold claim. “We think the Hemp Centre is the largest center in the world focused on providing a one-stop shopping experience for marijuana and marijuana-related products,” according to Corey Wagner, executive vice president of Western Centers. “Well, maybe not in the world, but in the U.S.,” he said, amending his statement. While it may sound like hyperbole, the claim for the Hemp Centre, formerly known as Chambers Point, at the southeast of corner of South Chambers Road and East Mexico Avenue in Aurora, is not without merit. In fact, when Western Centers’ vision for the Hemp Centre is in place, it may be a global leader in serving the cannabis community. “We see this as a model for other centers like it across the nation,” as other states follow Colorado’s lead and legalize the use of marijuana, said Joel Meranski, of Colliers International, who is leasing the center. They already have been contacted by a group out of San Francisco that likes the concept and believes it can be expanded across the U.S. “Colorado is clearly a leader and on the forefront as far as legalizing the use of marijuana,” Wagner said. “If you drive around the metro area, you will find that most of the marijuana-related retail stores are either in small, older, standalone buildings or are part of older, kind of worn-down strip centers,” Wagner said. Many landlords also worry of the potential of property being seized by federal agencies, he noted. Also, it can be tricky to deal with some marijuana businesses because of their difficulty in getting bank accounts. “That is a question we ask all potential tenants,” Wagner said. “We don’t want to have our rent paid in cash,” he said. “We want checks or direct deposits.” Not only is the Hemp Centre almost certainly the largest center dedicated to the marijuana industry, but Western Centers is in the process of completing a $1 million renovation of the center that was built in the 1980s. Western Centers has owned it for about the past 15 years and managed it for about 25 years. So far, the Hemp Centre has attracted three leaders in the marijuana industry: • Myxed Up Creations, one Colorado’s largest head shops, which will be expanding into a 7,000-square-foot space. The superstore will offer pipes, vapor pens, electronic cigarettes and clothing and will open in the fourth quarter. • Grofax, a hydroponics supply company, is taking about 2,000 sf. This is its fourth store and provides everything from soil to lights and expert advice on how to grow marijuana and other plants. • Rocky Roads will occupy about 2,400 sf for a retail marijuana store. It was one of the few applicants to receive a license from Aurora. Other tenants could be restaurants that have a marijuana motif, Meranski said. However, Wagner’s and Meranski’s definition of a tenant that would be appropriate for the Hemp Centre may surprise some people. “We are looking for tenants that not only directly service the marijuana industry, but those with ancillary and complementary businesses,” Meranski said. They not only want the obvious cannabis candidates, but also they welcome tenants who think that smoking marijuana is not a good thing. “One of our largest tenants is a church, and they take a strong stance that marijuana is not the answer and God is,” Wagner said. However, the church was on board with the Hemp Centre, as it saw it as an opportunity to potentially reach some pot users with its own message, he said. Indeed, Arnie Meranski, Joel’s father, and the founder of Western Centers about 25 years ago, is a major investor of an online company called In The Rooms, which provides access to information regarding those with alcohol or drug problems. Although not associated with Alcoholics Anonymous or Narcotics Anonymous, the site says it is home to the largest AA and NA community in the world. Potential tenants in the Hemp Centre could be physicians, counselors and therapists who work with people who are abusing marijuana, according to Wagner and Joel Meranski. Indeed, at first Arnie Meranski had no interest in leasing space to marijuana businesses, Wagner said. “Then, we looked around and realized that there was a high likelihood that if we didn’t lease space to people in the industry, they likely would go to centers across the street,” Wagner said. However, if they concentrated the tenants in one center, they could have control over things such as security and the environment, giving consumers a pleasant place to shop. “We’re not saying that marijuana use is a good thing and we are not saying that marijuana use is a bad thing,” Wagner said. Rather, it is a reality that the industry will continue to grow and they are dealing with it in a nonjudgmental way, he said. He said that most of the existing tenants in the center are fine with the marijuana businesses. One reason is that traffic to the center continues to grow with the new marijuana tenants, he said. Of course, it is possible that as some existing leases expire, Western Centers will evaluate whether it wants to renew them or replace them with businesses in the marijuana trade, according to Wagner. Wagner also emphasized that Joel Meranski was not hired to lease the Hemp Centre because he is Arnie’s son. “It was purely a business decision,” Wagner said. “We needed a broker who specialized in the marijuana industry and knows all of the players, and Joel has carved out a great niche in the industry,” Wagner said. “Currently, probably 70 percent to 80 percent of my business is marijuana related,” Meranski said. Also, he has been working with and collaborating with brokers at smaller brokerage companies who want to specialize in working with tenants in the marijuana industry.