Neighborhood Marijuana Businesses Raise the Price of Nearby Homes by Over $27,000

When people talk about all the ways marijuana legalization will help Americans, they usually talk about additional tax revenue for the government, less arrests being made and possibly jobs. But did you know the real estate market benefits as well?

According to a recent study, marijuana businesses raised the price of nearby homes in Denver, Colorado by an average of $27,000. The researchers drew a circle one-tenth of a mile around 103 marijuana businesses in Denver and compared the prices of homes inside that circle with those outside of it. Houses inside the circle were on average about eight percent more valuable than those outside the circle, even when there were no differences between the actual houses. 

The question now is why are the houses more valuable? Why would being one-tenth of a mile away from a marijuana business be worth such a premium? There are several theories. One is that the marijuana industry has created a ton of new jobs, and new employees of the industry are paying more to live near their work. Another is that people simply view living near a dispensary as a premium similar to being near good schools or public transportation. 

Another theory points out that most marijuana businesses in Denver opened in areas where home prices were already fairly low. So the introduction of new business and economic activity to the area was bound to increase home values, regardless if the business was marijuana-related or not.

Either way, it still more proof that marijuana businesses only help places where legalization occurs. 

(h/t Global News)


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