Weed Startups Will Make Warehouse Rents More Expensive in L.A. and Boston

Industrial rents in already-pricey cities like Los Angeles and Boston are poised to rise further thanks to one burgeoning industry: cannabis.

Marijuana startups are snapping up space in those cities as part of a wave of legalization that was set in motion by ballot-box victories last November, when eight states voted to permit cannabis in some form. California and Massachusetts will begin allowing residents to purchase recreational pot — not just medicinal marijuana — making the states especially attractive to entrepreneurs.

Legal weed already has a track record of driving up rents. The going rate for industrial real estate in Denver, Seattle, and Portland, Oregon — places that previously relaxed cannabis laws — have grown faster than in cities where the substance is still banned, according to new research from CoStar Group Inc.

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