As recreational marijuana sales ramp up throughout California’s Bay Area, could the newly legal drug end up creating an unexpected type of high — in the real estate market?
Researchers looking at the impact of legalized recreational marijuana on Denver’s home prices found a surprising trend: dispensaries that began selling recreational marijuana had a “large positive impact on neighboring property values.”
After recreational sales became legal, houses close to a participating dispensary saw their value increase more than 8 percent relative to homes located slightly farther away, the study found. It’s a small study based on data from only one metro area, but the research — the first of its kind — could provide an important glimpse into the potential impact of legalization.
“We went into the project and we weren’t really sure what to expect,” said James Conklin a real estate professor at the University of Georgia who co-authored the paper called “Contact High: The External Effects of Retail Marijuana Establishments on House Prices” last summer. “We thought maybe there would be a negative impact. I think our takeaway after working on the project was that we don’t see a negative effect — we do see results point to a positive effect.”
Conklin and his co-authors found that after recreational marijuana sales became legal in Denver at the beginning of 2014, single-family homes located near dispensaries saw their values go up. Homes within 0.1 miles of a dispensary saw gains of 8.4 percent relative to houses located between 0.1 and 0.25 miles away.
These weren’t new dispensaries — they were existing medical marijuana dispensaries that expanded to recreational sales when it became legal.
Read the rest of this story at TheCannabist.co
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