ST. LOUIS – Consumers aren’t the only ones getting high in legal states. According to a new report from nationwide brokerage service Clever Real Estate, cannabis elevates home values too.
From 2017 to 2019, residential property values after legalization rose an average of $401 for every $1 million the state collected in cannabis tax revenue, the study noted. “States that have legalized and allowed sales of recreational marijuana see the biggest increases in home values,” the report stated. “Between April 2017 and April 2021, property values rose $17,113 more in states where recreational marijuana is legal, compared to states where marijuana is illegal or limited to medicinal use.”
What’s more, Clever discovered a positive correlation between home values and dispensaries. “Home values increased $22,090 more in cities with recreational dispensaries, compared to home values in cities where recreational marijuana is legal but dispensaries are not available,” according to the report. Moreover, “With each new [recreational or medical] dispensary a city adds, property values increase by $519.”
Potential contributing factors are unsurprising. The survey noted cannabis contributes to perceived quality of life for people affected by certain medical conditions, and dispensaries add to the number of available jobs. In addition, many states allocate a percentage of cannabis tax revenue to education, which may encourage families to relocate to better school districts. Public services and infrastructure also benefit from cannabis tax dollars. All those factors increase housing demand.
Clever’s survey incorporated publicly available data from sources including Zillow, the U.S. Census Bureau, the Tax Foundation, and the Bureau of Labor Statistics. Analysts used multiple regression models and corrected for factors including population, unrelated increases in tax revenue, and the extraordinary home price escalation related to the pandemic.