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As cannabis production and processing gears up to meet expected demand, companies will be seeking more warehouse space to store product.Sean Kilpatrick

The connection between commercial real estate and marijuana legalization may not be the first thing that comes to mind. But the link is clear to analysts.

Legalization this year will usher in an entirely new, ready-made industry, needing lots of warehouse space in an already tight commercial real estate market.

A report by real estate service company JLL predicts higher demand for all kinds of warehouse properties, with smaller marijuana companies likely to boost demand and prices in the warehouse leasing market, and with large producers looking to buy warehouses outright.

The report anticipates that marijuana growers will occupy more than eight million square feet of commercial space in Canada by 2019-20. Brett Miller, JLL Canada's chief executive officer, notes that although this figure may not seem unduly large, it means significant new demand in an already supply-strapped warehouse market.

Alberta is seen as particularly likely to benefit, as commercial real estate in the province is already showing signs of recovering from its oil-led slump.

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