Home values in cities with adult-use cannabis markets are up by $6.337 from 2014 prices compared to cities that do not allow recreational cannabis sales, according to a Clever Real Estate study. From 2014, home prices in cities “within close access to legal dispensaries” were up 8.4 percent – an average of $22,888.
Home values in cities with legal medical cannabis access had the same growth as cities with full prohibition.
“States that legalize recreational cannabis see an immediate bump in home values following legalization, even without retail dispensaries opening up,” the study states.
The highest increases in the housing prices were in Colorado and Washington – who became the first states to legalize cannabis for recreational use in 2012. The study does point out that other factors do play a role in statewide house price increases; the West Coast housing market has seen steady growth since 2012 that can’t be attributed to the 2016 voter-approved legalization law, for example.
Post-legalization, some states have seen an increase in industrial property values that are used for cultivation and processing. Last year in Sonoma County, California, industrial properties for cannabis businesses saw a 50 percent increase in price over similar non-cannabis properties.
Many critics of legal cannabis fear potential crime increases following legalization which could lead to a possible reduction in home values related to that crime. A study earlier this year by the School of Public Affairs at the University of Colorado Denver did note an initial increase in crime rates after a dispensary opens in a neighborhood but that spike “weakened significantly over time.”
Get daily cannabis business news updates. Subscribe