New data from the University of Wisconsin and California State University found that homes within .1 mile of marijuana dispensaries have been increasing in value.
Most potential homeowners think about purchasing property with a beautiful view, or on the waterfront, but buyers looking for a good investment may want to consider homes very close to a marijuana dispensary.
In a new report referred to as “Contact High,” researchers from Wisconsin and California State University compared the value of homes that were located within .1 mile of a recreational marijuana dispensary versus those further away.
“Our results indicate that retail conversion has a large positive impact on neighboring property values after controlling for property attributes and neighborhood characteristics,” researchers wrote according to the Colorado Springs Independent.
A “retail conversion” refers to recreational marijuana shops that previously operated as medical dispensaries.
Single-family homes that were within .1 mile of a converted store increased their value by 8 percent in the first two years of recreational sales compared to similar properties further away. The home’s value rose by an average of $27,000.
Of course, there could be a considerable amount of variables at play here, as study researchers noted.
“Potential explanations include, but are not limited to: a surge in housing demand spurred by marijuana-related employment growth, lower crime rates, and additional amenities locating in close proximity to retail conversions,” researchers noted.
“Taken together, an increase in marijuana-related jobs, a tightened housing market, as well as the evidence we present that the housing stock near (within .1 mile) of a medical dispensary is relatively lower valued than other housing stock all combine to provide a story that there were many competitive buyers for the more affordable units in the city and the fact that they are located near retail dispensaries is not considered a disamenity. In fact, if many of these buyers have marijuana-related jobs, living near a retail dispensary could be considered an amenity.”
Legal marijuana is known to be an economic stimulator. According to NORML, Colorado has created over 23,000 full-time jobs in the marijuana industry. In 2016, the state collected approximately $200 million in tax revenue.