April 12, 2019
The passage of statewide adult use marijuana laws is associated with an immediate uptick in housing prices, according to an assessment published by the online service Clever Real Estate.
The study determined: “States that legalize recreational cannabis see an immediate bump in home values following legalization, even without retail dispensaries opening up. From 2017 to 2019, cities where recreational marijuana is legal saw home values increase $6,337 more than cities where marijuana is illegal” after controlling for potential confounders.
Cities that regulated retail marijuana facilities experienced an even greater increase in overall home prices.
By contrast, the study did not identify a similar significant increase in home prices in cities where only medical cannabis was legally regulated.
Regarding crime rates following the passage of legalization, the study failed to identify any overall trends in legal states that significantly differed from the national average. “The crime rate increases in Washington and Colorado are consistent with nationwide violent crime trends since 2014. … Using Colorado and Washington as case studies, it’s clear that the market benefits from marijuana legalization outweigh the potential costs in terms of home values,” the study’s author concluded.
Full text of the study, “How Legalizing Recreational Marijuana Impacts Home Values,” appears online here.