How does a town legalizing marijuana have any affect on market values? The recent decision by Massachusetts voters to legalize marijuana, and the subsequent appearance of the state’s very first marijuana dispensaries, have been met with equal measures of trepidation and jubilation, depending on where you stand on the issue. But as with any new phenomena, there was little hard data showing what impacts marijuana legalization actually has on communities.
That’s starting to change. Marijuana has been legal for several years now in many states, and the early data has been almost uniformly encouraging, especially for homeowners. Let’s look at some of the numbers from Clever’s latest study. You’ll see key information on how legalization of marijuana could impact home values.
Good news first: Massachusetts homeowners have most likely already seen a big bump in their home values, thanks to marijuana legalization. A survey of the data shows that home values increase immediately after a state legalizes marijuana, even before retail dispensaries open up.
From 2017 to 2019, cities where recreational use of marijuana was legalized saw home values increase $6,337 more than cities where marijuana was illegal. So in that period between 2016, when marijuana was officially legalized in Massachusetts, to 2018, when dispensaries finally opened up, home prices were already going up.
So what happens after the dispensaries open? Some surveyed citizens felt that when retail dispensaries opened their doors, crime would follow, and that increased crime rates would drive down property values. Happily, we’ve seen the opposite effect.
From 2014 to 2019, cities that allowed retail dispensaries saw home values increase $22,888 more than cities where marijuana remained illegal. A further analysis by the right-leaning Cato Institute confirmed and fleshed out