Home Prices Spike Following Opening Of Marijuana Retailers

Fort Collins, CO: The opening of marijuana retailers is positively associated with rising neighborhood home values, according to data published in the journal Contemporary Economic Policy.

Colorado State University researchers assessed the impact of dispensary openings in Denver on home prices in the immediate vicinity. They reported: “[A] new dispensary opening increases house prices by 7.7 percent for houses within a 0.25-mile radius of a dispensary relative to a control group. For houses within a 0.25 – 0.5-mile radius, the effect is slightly lower at around five percent. … The treatment effect is also larger, around ten percent, for homes with no preexisting dispensaries nearby.”

Dispensaries had no effect on housing prices for properties located more than one-half mile away.

“Our results, combined with previous estimates in the literature provide a comprehensive analysis of the effect of marijuana dispensing on housing prices,” authors concluded. “Our findings suggest that legalization and dispensary openings create localized net benefits.”

The study’s findings are consistent with those of other papers, such as those here and here, which similarly report a rise in home values in neighborhoods in close proximity to marijuana-related businesses.

For more information, contact Paul Armentano, NORML Deputy Director, at: paul@norml.org. Full text of the study, “The effect of marijuana dispensary openings on housing prices,” appears in Contemporary Economic Policy. NORML’s fact-sheet, “Societal Impacts of Cannabis Dispensaries/Retailers,” is online.