Study: Cannabis-Friendly States See Faster-Growing Home Values

From 2017 to 2021, home prices in states with adult-use cannabis laws grew by an average of $17,113 more than in states where cannabis remains prohibited or is only allowed for medical use, according to a Clever Real Estate analysis outlined by National Mortgage News. So far this year, housing values in legal states increased $470 for every $1 million in 2020 cannabis revenues.

House prices in those states also increased $519 for every new dispensary a city adds, the researchers found. Among the five states that have passed cannabis reforms but have not yet allowed sales—Montana, New Mexico, New York, Vermont, and Virginia—the study suggests home values would have been 13.5% higher had if they had allowed recreational sales over the previous four years.

Clever Data Scientist Francesca Ortegren said she expects the trend to continue as more states pass the reforms and begin to allow adult-use sales.

“An interesting phenomenon we might encounter is county or city-level regulations prohibiting sales within legal states. Prohibiting sales of recreational marijuana in a municipality would cause citizens to venture out to purchase marijuana and reduce the amount of cash flow in the ‘dry’ county. Even counties that don’t allow alcohol generate far less tax revenue than their ‘wet’ counterparts.”—Ortegren to National Mortgage News

A study published in March by insurance comparison company the Zebra found that just 46% of Americans would purchase a home within one mile of a cannabis dispensary.

A National Association of Realtors study published last year found 34% of respondents said there had been an increase in demand for warehouses in states with legalized cannabis since 2016.

A 2019 report by RE/MAX found both home prices and home sales in Canada increased post-legalization.