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Study Suggests States that Legalize Cannabis Instantly Bump Up Home Values

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[dropcap class=”kp-dropcap”]A[/dropcap] new study from Clever Real Estate, an online service that connects homebuyers with agents, suggests that states that legalize cannabis see an almost instant uptick in home values. It’s only the latest study to suggest that cannabis legalization directly affects the homebuyer market.

Investigators looked at home prices in Colorado and Washington, the first two states to legalize recreational cannabis. Only communities with at least one dispensary were observed. Cities that specifically allow storefront dispensaries saw home values increase $22,888 more on average than cities where cannabis is illegal, from 2014 to 2019. From 2017 to 2019, cities where recreational cannabis is legal, with or without dispensaries, saw home values increase $6,337 more than cities where cannabis is illegal. However in cities where only medical cannabis is legal, home values increased at a comparable rate to cities where recreational cannabis is illegal, suggesting that recreational sales have a much bigger impact on the economy.

“Colorado homes have increased by 58 percent and Washington home values have increased by 57 percent in the five years since legal commercial sales began,” the study found. California, Maine, Massachusetts, Michigan and Nevada legalized recreational marijuana legislation in 2016, with more states legalizing cannabis later on. “Interestingly, all of the states that legalized in 2016 saw above average home values immediately after their respective bills were passed.”

Some residents in California aren’t sure whether the cannabis industry is any different than any other industry. “We bring a lot of people to the block,” Sacramento, California resident and dispensary shopper Brad Wenger told CBS Sacramento. “Between us and the restaurants, the new coffee shops, the new local business that are coming in. We’re just a part of that, really. We don’t see ourselves as anything different.”

The rollout of recreational cannabis is doing exactly what activists promised—providing a measurable economic boost, specifically in the housing markets. This study supports previous studies that have suggest similar trends.

 

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