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Home values in states with legal cannabis markets have grown at significantly faster rates over the past decade compared to prohibitionist states. According to a Leafly and Real Estate Witch study, homes in cannabis states are 41% higher in value than homes in states without legal cannabis markets.
The paper looked at the potential impact of recreational or medical cannabis markets on average American home prices from 2014–2023.
Although states such as California began legalizing medical cannabis more than a decade ago, the past decade has seen a multitude of states legalize the controversial plant. With dozens of states now allowing medical and recreational cannabis, tens of millions of Americans now have access to either medical or adult-use marijuana.
However, several states still outlaw both recreational and medical cannabis, meaning there are plenty of Americans who are still criminalized for cannabis possession and use.
Cannabis remains the most used drug in the country, even in states that still criminalize it, and it seems the drug may now be affecting real estate values across the country. The analysis revealed that average home prices in states with recreational cannabis markets increased by $185,075 since 2014 compared to $136,092 in states without adult-use markets.
As a result, average home prices in recreational cannabis states hit $417,625 by the end of the study period while average home prices in nonrecreational marijuana states were 41% lower at $295,338. States with medical marijuana markets also registered faster home value growth compared to states without medical cannabis reform, growing by an average of $166,609 since 2014 compared to $137,320 in prohibitionist states.
According to the report, it isn’t surprising that states that embraced cannabis reform are registering significant increases in home values because real estate always appreciates over time. However, the gap between states with cannabis markets and prohibitionist states “sticks out like a green thumb,” the report noted.
There was even evidence of cannabis reform affecting home values at local levels with cities that had licensed cannabis retailers seeing an average home price increase of $168,292 since 2014. In comparison, cities without cannabis dispensaries saw an increase of only $100,933 in the same period, indicating that cannabis legalization may have some effect on property values.
Leafly vice president of brand and communication Josh deBerge said the report is evidence of what many cannabis community insiders have known for a long time: cannabis reform does not diminish property values. Rather, licensing cannabis firms such as Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) boosts demand for residential and commercial property.
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