States with legalized cannabis witnessed a faster growth in home values compared to those without, reveals a recent study. The data highlighted that over the last decade, properties in states with recreational cannabis appreciated by $48,983 more than those in states without.
The study conducted by Real Estate Witch and Leafly indicated that since 2014, property values rose by an average of $185,075 in the 23 states that have embraced recreational cannabis. In contrast, states without legalized adult-use cannabis saw an appreciation of $136,092. Properties in states with recreational marijuana were valued at $417,625, a staggering 41% more than the $295,338 in states opposing recreational cannabis.
Interestingly, seven out of the ten states witnessing the highest surge in property values have legalized adult-use cannabis. Conversely, nine out of the ten states with minimal growth in property values haven’t legalized it.
Moreover, homes in states with legalized medical marijuana were more valuable compared to those in states opposing it. These properties appreciated by $166,609 since 2014, as opposed to the $137,320 appreciation in non-medical marijuana states. Homes in states supporting medicinal cannabis were priced at $337,360, in contrast to the $281,343 in the opposing states.
Josh deBerge, Leafly’s vice president of brand and communications, commented on the findings, highlighting that legal cannabis positively impacts property values, reflecting its economic benefits to the community.
Improved Home Values in Dispensary Cities
Cities with legalized recreational cannabis and dispensaries witnessed higher property appreciation. These properties surged by $168,292 since 2014, which is $67,359 more than the appreciation in cities with legalized cannabis but without dispensaries.
Forecasts indicate that by 2023, the combined cannabis revenue for the 23 states and Washington, D.C., will approach $25 billion.
Additionally, tax revenue from cannabis sales was noticeably higher in states with legalized marijuana. In 2022, these states collectively added an average of $307 million in tax revenue, amounting to a massive $3.7 billion. Notably, California, which commenced recreational cannabis sales in 2018, contributed an impressive $1.1 billion in tax revenue from cannabis in 2022.
This cannabis tax revenue has been channeled back into communities, leading to enhanced living standards. As the study mentions, revenue from legalized cannabis sales often gets allocated to public initiatives that focus on elevating the life quality of its residents.
States often disclose how they utilize their cannabis tax revenue, offering transparency to their citizens. For instance, California dedicates 60% of its cannabis tax revenue towards youth substance use prevention, with the remainder divided between environmental conservation and law enforcement. Across states supporting legalized cannabis, popular avenues for cannabis tax spending are education, infrastructure, law enforcement, and substance abuse rehabilitation.
