PHOENIX — Concerns are growing over the potential for Arizona to face an overabundance of medical marijuana.
In 2014, there were 63,417 active medical marijuana cardholders and more than 1 million square feet of working cultivation facilities for the plant. But according to data gathered by Benchmark Commercial Real Estate, the amount of land the state has approved for potential pot cultivation is much larger than what is needed in the current medical marijuana market.
“We were a little bit surprised to find out that there is 26 million square feet of land that is attached to approved cultivation properties,” Roy Ginnell, broker and owner of Benchmark Commercial, said.
Ginnell said he and his team have spent nearly a year collecting data from Arizona’s medical marijuana cultivation sites and dispensaries. He said he believes if all of the land that is approved to grow pot were currently being used, it could have a negative impact on the medical marijuana industry.
“We’re already five-fold the amount of square footage under permit than what is needed to source medicine for the patients and cardholders here in the state,” he said.
Ginnell said it comes down to simple supply and demand economics: If too much pot is grown, medical marijuana prices will plummet, which is temporarily good for consumers but bad for the industry as a whole.
“To have (prices drop) any further, I think you would see the potential for groups going out of business,” he said. “If price wars continue to happen, they’re likely to have to fold up shop.”