Only a little over a year has passed since the heated 2016 elections. And the memory still hangs heavy like fuzzy smoke in a hot-boxed room. Yet, those monumental elections served Americans heaping helpings of both bad and good news. Four years with a chaotic new administration but also four states with newly legalized recreational bud. And also three more states with legal medical cannabis. Like these states, many others are currently examining the consequences of legalization in states like Colorado. After legalization, it experienced several hundred million dollars in tax revenue, funding scholarships for university-bound students. And even raising local property values.
A Growing Need For Housing
Utilizing data from Colorado’s pioneer model of cannabis legalization, the Wisconsin School of Business at the University of Wisconsin-Madison completed research indicating Denver property values have surged since Colorado’s legalization of recreational marijuana in January 2014. In their conclusions, if shacked up near a recreational cannabis dispensary within 0.1 miles, a single-family residence increased in value about 8.4%. This is compared to houses further away from a retail store after recreational marijuana sales became legal in 2014.
Continuing the positive vibes, since Colorado pot shops opened their doors to the public on January 1, 2014, median home prices in the state have jumped from $248,000 in the first half of 2014 to $298,000 in the first half of 2016, according to realtor.com. This surge could be attributed to the rising population of the mountain state. After all, there are hordes of transplants seek employment in the canna-industry. Still, housing demands continue to grow to accommodate out-of-staters looking to plant roots in Colorado. Whether they be tokers, medical users, or entrepreneurs, they’re looking for a place to live.
Private housing values in Colorado experience gains the closer they are to a dispensary. And yet, other states feel wary about the real estate market after long-awaited legalization. In California, a state with a winning 2016 legalization vote, many experts worry Sacramento homeowners may experience property value loss. This fear contends with the home’s proximity to a cannabis-growing operation, such as a warehouse facility.
Final Hit: Are Property Values Affected By Weed Legalization?
As of September 2017, more than 100 Sacramento businesses sought special permits to start indoor growing operations, altogether creating more legal marijuana growers in Sacramento than total McDonald’s and stand-alone Starbucks storefronts. These new cannabis cultivation operations, though heavily regulated in terms of controlling odors and security, present their new neighborhoods with some concerns. Namely, the strong stank in the air of pungent green and the potential for crime. Although it’s worth noting that Colorado’s example shows a 10% reduction in crime in the first four months of legalization. Even still, the benefits to neighborhoods appear imbalanced, benefiting only certain areas. Even in Colorado, trends indicate that neighborhoods with a grow house—unlike those close to dispensaries—experience an 8.4% discount on housing prices.
Nonetheless, Colorado’s rising housing market showcases a clear overall positive impact from legalized bud. In states where Mary Jane is illegal, altogether homes have only appreciated in value 9%, as compared to homes in Colorado, which claim a 12% appreciation since 2014. These promising figures provide a persuasive foundation for states looking to reach that new high—with cannabis and with property values.