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Homes Close To Cannabis Dispensaries Are Rising In Value
It’s a good time to be in real estate, with the increase in home values seeing no other way but up. And legalization seems to have had a hand in that.
The number of studies revealing that cannabis legalization and the presence of pot businesses is associated with increasing home values only continues to grow. For potential homebuyers, that may be an issue; however, for investors and homeowners, it’s fantastic news.
The results of a recent analysis by Tomo Real Estate was published at the end of June 2024, showing that houses that are within proximity to marijuana shops and retailers have a high likelihood of appreciation. For the analysis, they studied the association between marijuana shops and home prices in 3 states, namely: Colorado, Michigan, and Oregon. The analysts took into account the yearly increase or decrease in median house prices for homes in zip codes with cannabis dispensaries and compared them to home prices in other zip codes.
They found that houses in towns with cannabis dispensaries saw a rise in home values annually worth $4,400.
Similar findings were seen in an analysis from 2023, conducted by Real Estate Witch, an online magazine owned and produced by Clever Real Estate. The analysis was done together with Leafly. At the time of study, adult use marijuana was legal in 23 states as well as Washington DC. The analysts found that states that have legalized recreational cannabis have seen a jump of $48,989 in home values within the last decade.
Meanwhile, in states that have legalized medical marijuana, home values have skyrocketed $166,609 from 2014. These figures are $29,289 more compared to states that haven’t legalized medical marijuana.
“There’s a notion that dispensaries hurt property values, but the data shows cities in recreational states that have dispensaries report better home-value growth than cities without dispensaries in legal states,” the authors reported. “Cities in recreational states with dispensaries have seen home values grow $168,292 since 2014, $57,359 more than the $100,933 growth in cities with legal recreational cannabis but no dispensaries,” they said.
“States that haven’t legalized recreational cannabis are missing out on a range of economic benefits, with one of the biggest being a rapid appreciation in home values,” they concluded.
What Factors Result in Increased Home Values For Those Near Weed Shops And Retailers?
Given the sheer number of studies pointing to evidence of homes and residences, or real estate in general, appreciating significantly more when they are located next to marijuana businesses, we can safely say that the presence of marijuana retailers is a sign of a robust economy. It certainly contributes to the improvement of a community and city in many ways, too.
Several of these studies have similar factors in common, which lead to an increase in home values.
These include:
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Better economic activity: Opening a cannabis dispensary can provide a much-needed economic boost to local businesses in a town. At the same time, weed retailers will also help attract new businesses, resulting in a healthy cycle of improved economic growth. This thriving economic activity can help a neighborhood become more attractive to investors, businesses, and homebuyers.
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Reduction in crime rates: There are many studies strongly backing up claims that cannabis businesses lead to a decrease in crime rates. While prohibitionists prefer to argue (senselessly) that cannabis businesses and decriminalization lead to an increase in crime, the opposite is true – and there is data to back it up. After all, marijuana dispensaries usually have tough security measures which also help boost security and safety in an area.
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Increased job generation: Marijuana dispensaries generate more jobs, and that’s a fact. Increased employment opportunities aren’t just for jobs in the dispensary but also in ancillary or related businesses including retail, sales, marketing, security, logistics, cultivation, agriculture, and so much more. Of course, a boost in job creation may attract more new residents to relocate to a certain area because of economic opportunities. This, in turn, also leads to a better demand for housing.
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Better community amenities: When cannabis dispensaries appear in a community, it’s a sign that many more neighborhood improvements can be expected. These can include improved infrastructure, a variety of retail options, and a range of wellness and health-related community services. All of these contribute to making a neighborhood much more desirable.
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Progressive behavior: Neighborhoods, towns, and counties with more cannabis dispensaries are perceived as more trendy or progressive. This can attract more young people and investors to funnel their cash towards even more amenities and improvements. Through the years
The presence of cannabis businesses and legalization on its own also have a direct impact on the real estate market. These include an increased demand in specialized properties, such as dispensaries, cultivation facilities, processing centers and much more. In effect, there will also be an impact in zoning as well as regulatory considerations. Other ways that cannabis and real estate affect each other include the adaptive reuse of properties, technological integration, and much more – showing a significantly dynamic relationship between the two.
Conclusion
Where there is weed, home prices and real estate values will continue to go up. That said, we need to remember that the impact and increase of home values will certainly vary depending on the town, its regulations, the community’s attitudes towards marijuana, and how saturated or mature the market is. There will certainly be some cities where the appreciation of real estate is more pronounced than others.