Cannabis and Home Values

On November 6th, 2012 voters in Colorado passed Amendment 64 which would legalize the use of marijuana as well as pave the way for the sale of recreational marijuana to begin in January 2014.  Since then, the tax proceeds for the sale of recreational marijuana has topped $1,600,000,000.  This comes on the heels of over  $10,000,000,000 in regulated marijuana sales.  These assets that are accumulated in the state’s general fund, are used for a myriad of initiatives including; but not limited to, the Department of Education’s State Public School Fund, as well as the Marijuana Tax Cash Fund.  Additionally, legislators have set aside more than $25,000,000 to establish all day kindergartens across the state.  Along with increased tax revenue, states that allow recreational marijuana sales along with states that allow for the use of medical marijuana saw home values increase at a rapid rate.

Local governments that allow marijuana sales impose local taxes. As Colorado’s largest city, and with such a high per capita of dispensaries, Denver has raked in the highest tax revenues from adult-use marijuana sales in the state.  This has amounted to more than $290,000,000 in tax revenue in the city of Denver alone.  

Many advocates for the legalization of marijuana for both medical as well as recreational purposes point to instances like Denver to suggest states could be funding vital programs that are currently underfunded.  While the tax revenue is only a fraction of the budget for the city of Denver or the state of Colorado it is important to note that these funding measures simply did not exist a decade ago and to dismiss this stream of revenue for a city would be detrimental to its stated goals.  

Along with increased tax revenue, states that allow recreational marijuana sales along with states that allow for the use of medical marijuana saw home values increase at a rapid rate.  From 2014 to 2019 cities that allow for the legal sale of marijuana saw home values increase an average of $22, 888 dollars vs states that prohibited the sale of marijuana.

Colorado’s first retail dispensaries opened on January 1, 2014, and medical and recreational sales have generated over $948,000,000 in tax revenue. Denver has 180 dispensaries, the most of any Colorado city, and its housing market has seen unprecedented growth since recreational legalization in 2012.

Denver is a clear-cut example of dispensaries raising residential property values, but dispensaries have helped bring up property values all around Colorado. Cities in Colorado with dispensaries have higher than average property value growth compared to the national average.

Colorado and Washington, the first states to legalize cannabis for recreational use, have both seen above average home values since opening their first dispensaries in 2014. Colorado homes have increased by 58%, and Washington home values have increased 57% in the five years since legal commercial sales began.

So, why does recreational legalization and retail dispensaries lead to homing price boosts? According to a 2017 study from the University of Mississippi, recreational legalization “attracts more home buyers, including marijuana users as well as entrepreneurs and job seekers.” Businesses start to pop up, and job seekers flock to these cities, driving up the demand for housing and retail space.

The following information is presented for educational purposes only. Summit Releaf distributes this information to provide an understanding of the potential benefits of medical marijuana for patients living with one of the approved Ohio Medical Marijuana Control Program qualifying conditions for an Ohio marijuana card. Links to third party websites do not constitute an endorsement of these organizations by Summit Releaf and none should be inferred.

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