Legal cannabis drives economic growth and real estate values
As more states embrace legal cannabis in the U.S., many wonder how the reversal in policy will impact their lives. While licensed dispensaries seek to establish themselves in local communities, many sceptical residents default to an adversarial position of “not in my backyard.” Faced with such a dramatic change in long-held beliefs surrounding recreational drugs, the very notion of dispensaries selling legal cannabis is considered at best undesirable, at worst downright harmful. Recent studies, however, flip this antiquated thinking on its head. Based on a recent study of collected data, cannabis legalization is associated with higher property values and a measurable boost to states' economies.
In her report for Clever Real Estate, Dr. Francesca Ortegren reviewed “publicly available data from Zillow and the U.S. Census, among other sources, to explore the relationships between home values, marijuana legalization, dispensaries, and tax revenue” and arrived at some very compelling conclusions that will have many people re-evaluating their position on legalization.
Legal recreational cannabis drives community prosperity
Retail sales of cannabis not only drive tax revenue but also contribute to spending in local economies and job creation. Based on federal and state data, the cannabis industry currently supports 321,000 full-time jobs—of which 77,300 were created amidst the economic downturn caused by the pandemic in 2020.
These numbers are impressive but the upside of legalization doesn’t end here. Legal medicinal and recreational cannabis is a boom to states’ tax coffers. In 2020 alone, California collected over 1 billion in cannabis tax revenue—more than any other state.
What does this mean to the average American citizen—whether consumer or straightedge? Swelling tax revenue from legal cannabis sales allows state governments to invest in public education, substance abuse programs, criminal justice reform and pass on more money to local governments. This directly translates to an increased standard of living for countless communities. And as neighbourhoods are buoyed by investments, they attract new residents seeking economic opportunities and a better quality of life. This, in turn, drives demand for real estate, which pushes property values higher.
Home values are rising at a faster rate in legal cannabis markets
According to Dr. Ortegren’s research, “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.”
The reason these numbers are so surprising is that for years the public was fed a solid diet of anti-cannabis propaganda based on fear and racism, with little scientific evidence to back it up. The very idea that greenlighting retail dispensaries in a community could drive prosperity for all is such a reversal in attitudes that many states are missing out on millions of dollars in tax revenue, and the opportunity to see local economies prosper, citizens thrive and real estate values soar.
Given the economic upside of legal cannabis and the boost to local communities that welcome retail dispensaries, we expect more and more people to embrace a more cooperative dynamic regarding legalization and say, Yes in my backyard!
The full text of Dr. Francesca Ortegren’s study is available here.