Cannabis is known for making people high, but could it also be responsible for higher home values?
A recent report from Clever Offers found that from 2009 to 2024, home values in states where recreational cannabis use is legal increased by an average of $60,327 more than in states where it is illegal. Similarly, states that have legalized cannabis for medicinal use have seen average home values outpace states where cannabis is illegal by $22,185 over that period.
The research from the platform owned by Clever Real Estate also found that of the 10 states with the highest home value appreciation from 2009 through 2024, only Idaho has not legalized cannabis in some form. Conversely, 9 out of 10 states ranking lowest in home price growth since 2009 have not legalized recreational use of the drug more commonly known as marijuana.
The report acknowledges that “cannabis legalization is not the sole driver of property values.” For example, California leads all states with an average $492,520 increase in home values since 2009, according to Clever. But the Golden State has also seen home prices rise due to high demand and limited supply, strict housing laws and elevated land and constructions costs, among other factors, according to a report from the nonprofit news organization CalMatters.
But the Clever analysis also maintains that states with legalized cannabis “reap millions in tax revenue that is reinvested into public programs that make neighborhoods more desirable — and more valuable — to homebuyers.”
Colorado and Washington were the first states to legalize recreational cannabis use in 2012. Since then, another 22 states have followed suit. Cannabis is legal for strictly medicinal use in 15 states, and it remains illegal in 11 states, according to a report released in April by the National Association of Realtors (NAR).
Commercial real estate impacts
The NAR survey, which was conducted in March, found that in states with legalized recreational marijuana, nearly half of commercial Realtors reported an increase in demand for commercial spaces, which includes storefronts and warehouses.
The NAR survey also looked at commercial real estate values for properties located near marijuana dispensaries. About half of survey respondents reported no change in commercial property values, 7% to 12% reported an increase in property values and 10% to 20% of respondents noticed a decrease in property values.
