Legal marijuana offers big possibilities to many people in California, from pot farmers and dispensary owners to lawyers and accountants. But the modern-day green rush is proving especially helpful to one struggling community in the desert.
The Inland Empire city of Desert Hot Springs voted in 2014 to legalize medical marijuana farms, making it the first local government in the region to allow cannabis cultivation. The impact has been nothing short of profound.
Carlos Bravo owns a tow company in Desert Hot Springs. He told the Los Angeles Times in May that a real estate agent approached him in 2015 and offered $500,000 for a 5-acre plot of untended desert he had purchased six months earlier for one-fifth of the price.
“I thought he was joking,” Bravo said.
But the two closed the deal the next day. A few days after that, Bravo was approached by another developer, this one offering him $1 million.
Marijuana driving up value of land
For months, growers and developers have been busy buying up seemingly worthless real estate across Desert Hot Springs. The land, sometimes so isolated it has no utility access or roads, is being set aside for large cannabis grows.
“It’s pretty chaotic,” Coachella Valley real estate broker Marc Robinson told the Times. “I’m getting tons of calls from all over the world, all over the United States. My newest clients flew over from Germany.”
The cultivation sites will all be indoors but will require large amounts of land. That means expanded infrastructure, which costs money, but city officials believe the coming economic boom will more than make up the difference.
“I can only imagine what we can do with the tax revenue,” said Mayor Scott Matas. “We’re in need of parks, our roads are dilapidated – all around, our sidewalks, curbs, gutters.”
Neighboring communities to follow suit
But competition is coming, as a growing list of neighboring communities consider taking the same tack. That has pushed officials in Desert Hot Springs to work with developers to get their projects launched while the city still stands to profit.
Desert Hot Springs moved away from the anti-marijuana mentality of the Inland Empire after years of economic struggles. The city advertises itself as a tourist stop in the Coachella Valley, among the likes of Palm Springs, but development has historically been scarce.
Even the local chamber of commerce acknowledges traditional businesses can’t keep the local economy going. The city’s destinations aren’t enough “for it to become a vibrant and viable city instead of just a dusty little town north of the I-10,” said Heather Coladonato, president of the Desert Hot Springs Chamber of Commerce, which is working with prospective growers.
The city council voted during a fiscal crisis in 2014 to legalize medical marijuana cultivation and pot dispensaries. Growing zones were established, with much of the land located in barren stretches of desert.
At least 11 businesses have since secured licenses to grow medical cannabis in various parts of the city. Their operations will cover more than 1.7 million square feet of commercial land, a boon for the local real estate market.
There’s a windfall coming for the government, too. The city taxes farmers $25 per square foot of space used to grow marijuana plants, up to 3,000 square feet, with a price of $10 per square foot beyond that.