Chicago’s real estate industry is in the midst of a few building booms, but if a new startup has its way, another one is about to bloom: commercial cannabis real estate. HerbFront, co-founded by CEO Alan O’Connell and Matt Chapdelaine, head of business development, want to create the Zillow of marijuana-based real estate. Their concept, which they’re developing at the ElmSpring accelerator at 1871 and plan to release in February, is a tool that lets investors see where they can legally locate dispensaries and grow operations, and helps property owners discover if buildings in their portfolio qualify for this potentially lucrative market. According to O’Connell, zoning rules and regulations can make locating a dispensary or grow operation complicated, but the huge upside means entrepreneurs are looking for someone to help point them in the right direction.
“There’s a lot of murky water in the industry, right now,” says Chapdelaine. “A lot of people are looking to access real estate, and real estate people are looking to access the industry.”
HerbFront will offer an array of services, from listing a property for $50 on its database to leasing the software to providing specialized business intelligence to investors and municipalities, in effect becoming a consultancy as well as a marketplace for these industry-specific property transactions. Chapdelaine, who has background as a broker, saw what happened during the last permit application process in Illinois, and believes his program can fill an important gap, as well as provide a form of insurance for those spending at least $250,000 to obtain a permit. With that kind of down payment to start a small business, obtaining a guarantee from HerbFront that potential sites are properly zoned becomes valuable (or so the founders hope).
I could see how this service might be valuable. But, it seems less difficult to map the available properties than it will be to predict and/or know what these properties might be worth. How profitable are such facilities? Are there other businesses or services that want to be or are needed near marijuana facilities? More broadly, could these be tools for economic development? From what I read about planning for such facilities in different Chicago suburbs, there is still hesitation based on what kind of people and activity such facilities could attract as well as how they might affect the reputation and image of the community. But, if they became a unique opportunity for economic development, perhaps communities would be falling over themselves to attract one.