States where marijuana is legal have seen an influx of people moving there to enjoy cannabis without punishment. But has legalizing marijuana also improved real estate values? According to a new study, the answer is yes.
A group of researchers from around the country conducted a study on Colorado real estate prices before and after marijuana legalization, which they titled "Contact High." They found that houses that were 0.1 miles or less away from a marijuana dispensary saw their prices increase 8 percent more than homes that were a farther distance away. They estimated homes near marijuana dispensaries were worth an average of $27,000 more than those farther away.
"Our results indicate that retail conversion has a large positive impact on neighboring property values after controlling for property attributes and neighborhood characteristics," the researchers wrote.
It's probably not too surprising to see those. Dispensaries can be a hub for economic activity. With so many people visiting those areas to purchase marijuana, other businesses in the area see an increase in foot traffic and an increase in business as well. So when an area becomes more wealthy, home prices go up. Simple economics.
They noted that their study was conducted only from 2013 through 2014. Recreational marijuana became legal in Colorado in 2014, and originally only dispensaries that had previously sold medical marijuana dispensaries could also sell recreationally. So the neighborhoods they studied were only those where a marijuana dispensary had existed already. So it's unclear if dispensaries that opened after 2014 have had a similar impact on home prices.
So the good news is if you live near a dispensary, your house is worth more than it would be otherwise. But if you want to move near a dispensary, you'll have to fork over a little extra dough.