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A few years ago, Steve Arnold, who owns two marinas outside of Portland, had his pick of heated warehouses to lease, where he could store clients' boats in the winter.
But then medical marijuana growers came knocking. One moved into the 120,000-square-foot facility where he was storing close to 200 boats.
That's when he learned just how deeply the odor of high-quality pot can work its way into a boat's upholstery.
"On the pontoon boats and some of the fiberglass boats, not a big deal," Arnold said. "But some of the bigger boats, the cruisers 28 feet and above, there was a very strong smell."
That created some extra boat-cleaning work, but it also signaled more substantial changes to come. Arnold said his landlord continued to put a squeeze on the square footage available for boats.
"One year he came to me and said, 'Hey, I want the back area, I'm going to sublease it to marijuana growers,' " he recalled. "And I was like, 'All right.' So that was, call it 30,000 [square feet] of the warehouse. And then the following year he took another 20,000, so I saw the writing on the wall."
Arnold figured the growers could offer twice what he paid for the rented space. So he moved out and built his own boat warehouse.
And he's far from alone. These days, if you need industrial space in greater Portland, good luck.
Justin Lamontagne is a broker at the Dunham Group, a Portland real estate brokerage firm. In six years, he said, the vacancy rate in and around Portland has dropped to 1 percent, while lease and purchase prices have in some cases doubled.
"I've got conventional businesses and folks that employ hundreds of people that cannot find more space to grow any further or relocate," Lamontagne said. "So it's kind of a critical point right now in the industrial market."
However, demand from would-be marijuana growers does seem to have eased over the last quarter or two. That's partly because Maine lawmakers have been very slow to implement legalized recreational marijuana sales, which Maine voters approved in 2016.
"Investors are saying, 'Look, there's no certainty around either your medical or your adult-use programs in Maine right now,' " said Hannah King, an attorney with the advocacy group Maine Professionals for Regulating Marijuana.
King said some cultivators and their investors have recently abandoned Maine and set their sights instead on Massachusetts, where legalization is on a faster track.
"[Growers] know that Massachusetts has essentially finalized their regulatory regime — they are planning on first sales July of 2018," King said. "While we'd like to participate in Maine's market, we want certainty."
And Massachusetts brokers do see interest emerging. Austin Smith, a Boston-based broker with Colliers International, says he's working with a handful of growers who want to secure a footprint in Massachusetts.
"There's a ton of cultivators swirling around," Smith says. "A lot of them looking at existing buildings, some of them wanting to build their own buildings."
There's plenty of vacant industrial property in Massachusetts, he added. But uncertainty remains about the ultimate shape of the state's pot regulations. Towns might bar growing or sales within their borders — and never mind whether the federal government will decide to crack down.
"Everything is still up in the air," Smith said. "I'm doing deals right now that they can tear the lease up in a year if they don't get their license."
King said she's seen similar deals in Maine. And she says the Maine legislature is taking steps to expand the medical marijuana market.
That could justify some new investment in cultivation in that state. And, King said, her phone is actually ringing again.
This story comes via the New England News Collaborative and was first published by Maine Public.
This segment aired on April 10, 2018.
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