House prices in cannabis-friendly states see faster growth
US states with more lenient attitudes towards cannabis have seen house prices grow at a quicker rate, according to a new study.
An analysis by Clever Real Estate for National Mortgage News found that house prices in states where adults are permitted to use cannabis grew by an average of $17,113 more between 2017 and 2021 than those where it remains prohibited or is only allowed for medical use.
In 2021 alone, housing values in legal states have increased by $470 for every $1 million in cannabis-related revenue. Prices in the same locations have also risen by $519 for each new dispensary a city adds.
This comes after more and more states have passed reforms on legalisation, with Maryland recently announcing that it will be letting its citizens vote on the matter.
Montana, New Mexico, New York, Vermont and Virginia have also passed reforms but are still yet to allow sales.
The research claims that had they allowed recreational sales over the last four years, then their house prices would be 13.5% higher than they currently are.
Scientist Francesca Ortegren, who led the study, believes this a trend that will continue, as attitudes towards cannabis continue to change.
“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.”Francesca Ortegren, Clever Data
High property value in legal locations seems to be a common theme across the North American region.
A report published by RE/MAX in 2019 cited a similar trend in Canada post-legalisation, while a National Association of Realtors study last year found an increase in demand for warehouses in legal states.