Recreational marijuana – a path to higher house prices

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If you want to get a high estimate of the property’s value, look no further than home markets with legalized marijuana.

From April 2017 to April 2021, according to Clever Real Estate, home prices have risen by an average of $ 17,113 in states where the sale of cannabis for recreational purposes is permitted, compared to those where it is prohibited or strictly available for medical purposes only. purposes. While the marijuana industry has already grown increased house prices Thanks to the creation of jobs and the subsequent demand from buyers, it now adds value through tax revenues.

Eight states collected sales taxes in 2020, generating a combined $ 2.3 billion in revenue. California leads with over $ 1 billion, followed by $ 469.2 million in Washington and $ 387.5 million in Colorado.

A Clever study found that home values ​​increased by $ 470 in 2021 for every $ 1 million in tax revenue in 2020. They increase by an additional $ 519 for each new dispensary added to the city. This new stream of income is reinvested in infrastructure, education and public services. Improving the quality of life increases demand in these markets and drives up prices.

Home price increases would not diminish if the sale of recreational goods became legal in all states due to the direct impact on the local economy, data analyst Francesca Ortegren told NMN.

“Even now, we see more dispensaries correlating with higher home values ​​in states where sales are currently legal, so we expect this trend to continue,” she said.

As of July 2021, a total of 36 states and Washington, DC have legalized recreational cannabis to varying degrees. Five states – Montana, New Mexico, New York, Virginia and Vermont – have legalized recreational cannabis but have not started selling it. The study estimates that price increases would collectively be 13.5% higher if sales in these states were allowed over a four-year period. Housing prices jumped $ 22,090 more in cities with recreational dispensaries than in cities where recreational marijuana is legal but not yet available.

“An interesting phenomenon that we may encounter is ordinances at the county or city level that prohibit sales within legal states,” Ortegren said. “Banning the sale of recreational marijuana in the municipality will force citizens to take the risk of buying marijuana and reduce cash flow in the dry district. Even counties where alcohol is banned generate far less tax revenue than their “wet” counterparts. “





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