Voters, policy-makers, and economists are interested in the ways recreational marijuana legalization affects communities. Similarly, economists and homeowners are interested in how marijuana sales impact the value of their most prized possession … their home.
Using publicly available data from the city of Denver and the state of Colorado, business analysts from the University of Georgia, University of Wisconsin and California State University studied the impact of retail marijuana sales on property values. This study reflects a time before and after retail marijuana sales became legal in Colorado in 2014.
In the words of the authors, “…this is the first study to examine at a micro-level the highly localized effect of retail marijuana establishments on house prices…”
“Houses closest to dispensaries increased in value 8.4% …”
Economic impact was determined by measuring the distance from the marijuana facility, the value of a house before legalization and the value after legalization. Proximity to marijuana dispensaries was grouped into three categories: The first was 0-.1 miles, the second .1-.25 miles and the third greater than .25 miles. Then, changes in value during the study period were compared to identify any impact and how distance from the dispensary related to the change.
The conclusion: Houses closest to dispensaries increased in value 8.4% more than houses in the second category, which remained the same as those more than a quarter mile away. These findings supported those of an earlier Colorado study, which looked at economic impact on a municipal level, and found a 6% increase city-wide where recreational marijuana was adopted.
Coupled with “no evidence of increased marijuana usage or crimes due to recreational marijuana legalization,” these findings bode well for homeowners near retail marijuana dispensaries.
For greater detail, see Contact High: The External Effects of Retail Marijuana Establishments on House Prices at http://tinyurl.com/yb4vtz2g