Analysis: Marijuana Legalization Correlates with Higher Home Values

The enactment of adult-use marijuana legalization laws and retail sales is associated with increased home values, according to an economic analysis published this week by the online realtor website Clever Real Estate.

A data analyst with the group reviewed “publicly available data from Zillow and the U.S. Census, among other sources, to explore the relationships between home values, marijuana legalization, dispensaries, and tax revenue.” She then used “multiple regression analyses to model current trends and predict future patterns.”

Consistent with prior studies, such as those here, here, and here, the analysis reported, “Between April 2017 and April 2021, property values rose $17,113 more in states where recreational marijuana is legal, compared to states where marijuana is illegal or limited to medicinal use.”

The author added, “We found that cities with more dispensaries are positively correlated with higher home values, suggesting legalization boosts jobs and economic growth. … With each new dispensary a city adds, property values increase by $519.”

She concluded: “As more states legalize marijuana, there is strong evidence that legalization drives higher property values — particularly in areas that allow recreational marijuana and welcome retail dispensaries. … These investments can improve quality of life in communities across the nation while attracting tourism and new residents who drive real estate demand.”

The report’s findings come just days after separate data concluded that the establishment of licensed marijuana retailers did not influence young people’s intention to experiment with cannabis.

NORML’s Deputy Director Paul Armentano said: “This is further evidence that these establishments provide tangible benefits to their communities. These licensed businesses act as local stewards while stimulating economic growth. Local policymakers should welcome the opportunity to displace the illicit cannabis market in their communities with a transparent, regulated, above-ground, licit marketplace.”

Full text of the Clever Real Estate report is available online here. Additional information is available in the NORML fact-sheet, “Societal Impact of Cannabis Dispensaries/Retailers.”