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As provinces and cities embrace marijuana as the hot new industry, demand is increasing for property to grow plants and shops to sell pot.Don Ryan/The Associated Press

When SvN Architects and Planners was designing a cannabis facility for medical marijuana producer Cronos Group in Stayner, Ont., it had to include a 25-foot-high “landscape mound with plantings” to hide the property from the adjacent landowner.

“The pushback was from the adjoining property owners who were not used to having large-scale facilities,” Sony Rai, SvN’s lead architect, said at a land development conference in Toronto on Tuesday.

As provinces and cities embrace marijuana as the hot new industry, demand is increasing for property to grow plants and shops to sell pot.

But one of the biggest roadblocks to finding real estate is convincing skeptical neighbours that having a pot company next door is a good idea. Canopy Growth Corp., which calls itself the largest producer of legal cannabis, said getting the community on board was vital in setting up shop.

“Oftentimes it is very important that you have a strong community that supports you because there is still a lot of stigma associated with cannabis,” Jeff Ryan, a vice-president with Canopy Growth, said at the conference.

Mr. Ryan said communities, such as Smith Falls, Ont., have embraced his company. “You have to be a good partner, you have to go talk to your neighbours, mitigate odour, noise – all the things that any responsible farmer or industry would do. So we start from there and build out from there,” he said.

Although recreational cannabis is on track to become legal in Canada, it has a bad reputation among some property owners. So-called grow-ops have been known to ruin properties with excessive humidity.

On the retail side, others worry about the type of clientele a pot shop would attract and the atmosphere it creates.

“The perception is that it is a harmful product and you don’t want to be associated with it,” said Gaurav Mathur, research manager with commercial realtor Jones Lang LaSalle. “There is an apprehension from landlords … It’s not as simple as leasing a greenhouse for cucumbers. Everyone gets that.”

Canopy Growth expects to nearly double its production space to 5.6 million square feet by 2019 from about 2.4 million, according to a spokeswoman.

The company, which plans to be in seven provinces and is already operating internationally, has historically converted derelict buildings for its operations. Now, Canopy is looking to greenhouses instead of existing structures because it said that is the fastest way to scale up.

Jones Lang’s Mr. Mathur said his phone has been ringing off the hook as landowners and others try to figure out the cannabis industry.

But it’s more complicated than leasing a floor in an office building or finding a patch of land or industrial space. “We also have to tell them that there are a lot more requirements,” Mr. Mathur said on the panel. “It’s not an off-the-shelf solution.”

In addition to convincing a community or landlord on the merits of cannabis, there are a host of issues unique to growing marijuana such as security, heating, ventilation and massive amounts of energy consumption.

“A lot of people think that they can get into the business and just sort of buy an old warehouse, throw up some lights, get some soil and some seeds,” Mr. Ryan said. “It is capital intensive, it is extremely expensive and it is difficult to get a license.”

Editor’s note: An earlier version of this article referenced Canopy Growth’s vice-president saying it expects to nearly double its production space to 4.6 million square feet by 2019 from about 2.4 million. In fact, the company now says the number is 5.6-million. This version has been corrected.

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