CHICAGO -- Cannabis companies are eyeing sites on some of the priciest retail streets in Chicago, including the Magnificent Mile, as they get ready to sell recreational marijuana in Illinois.
Dispensaries have opened in marquee retail spots around the country -- like Fifth Avenue in New York and a mile from the Las Vegas strip. Chicago's turn may be next.
Real estate sources say industry players are scouting locations with heavy foot traffic and alongside well-known retailers, and they're doing so well before the city develops rules and regulations for cannabis sales, including amending the current zoning requirements.
If dispensaries end up on the Mag Mile, marijuana sales would bring a new definition of "high street" -- the term for the world's top retail streets -- at a time when North Michigan Avenue and similar shopping districts around the world are grappling with changes in shopping habits.
A bill signed by Illinois Gov. J.B. Pritzker this summer makes recreational marijuana use legal in Illinois starting Jan. 1, and sets the stage for existing medical dispensaries to expand their physical presence. The 55 medical dispensaries currently operating in in Illinois can apply to sell recreational marijuana at their stores. They also can open a second dispensary.
One opportunity being eyed on the Mag Mile, according to real estate sources, is the former Apple store at 679 N. Michigan Ave.
The space is controlled by Chicago-based Water Tower Realty, a small, local real estate investor, through a long-term ground lease. The multi-level, 30,000-square-foot space has been vacant since Apple moved its Mag Mile flagship south to a new building along the Chicago River in October 2017.
Water Tower Realty did not respond to requests for comment.
The scouting comes as retail landlords face challenges such as empty storefronts and bankruptcies that have pushed down rents. In Chicago, leases for top Mag Mile spaces averaged $450 per square foot in 2018, down from $550 the previous two years, according to Cushman & Wakefield.
Many property owners are rolling out the welcome mat, viewing cannabis as a fast-growing retail concept, said Dan Molnar, a broker at Baum Realty Group who is representing marijuana company Cresco Labs in retail leases in the Chicago area and other cities.