The legalization of cannabis in select states has created a new demand for homes and residences. With criminal penalties removed from the recreational use of marijuana in a private setting, people are flocking to those states to enjoy a lifestyle now open to them.
These bold states are experiencing a real estate boom like no other. Not only are people in a hurry to settle down in these states, but businesses are also quick to put down stakes and go into the canna-business.
Is it too late to get into the real estate market? On the contrary, there may never be a better time to settle your roots in a state that welcomes those who embrace a rather “green” lifestyle.
Why marijuana legalization is creating a real estate boom?
Considered a taboo subject at the turn of the 20th Century, public opinion on marijuana use (both medically and recreationally) has drastically changed. According to a 2019 study by Pew Research Center, two out of three Americans support the legalization of marijuana.
Despite this, only ten states have completely legalized the use of marijuana: California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington. An additional 18 states have legalized marijuana use for medical purposes, while all but three states have legalized limited-THC content marijuana for medical use.
However, the real estate boom is apparently clear in the ten states that have completely legalized marijuana. Not only do those seeking a different quality of life want to move there, but businesses are moving in to answer consumer demand. Farms, processing centers, and dispensaries are opening at an increased rate to provide the public with what they want.
But direct marijuana use isn’t the only reason real estate is in high demand. Distilleries producing full-spectrum CBD oil are also opening a business in these states. For years, peer-reviewed studies have suggested cannabinoids could be beneficial. As a result, high-quality, full-spectrum CBD oil is available for the first time on the broad market thanks to marijuana legalization laws.
Marijuana legalization in the homeowner marketplace
The obvious connection to the real estate boom comes from the homeowner and consumer marketplace. With legal, regulated dispensaries opening and operating under state law, home prices are climbing with consumer demand.
But can we directly link the rising price and demand for homes and apartments to marijuana legalization? A 2018 study published in Contemporary Economic Policy suggests there is a correlation. Studying home prices in Denver, Colorado, research uncovered when a new dispensary opened, home prices increased by 7.7% on average. And for those homes that were further away, while the price didn’t go up immediately, home prices slowly rose over time.
The relationship is clearly demonstrated. As marijuana continues to get legalized, it creates a positive effect for new home builds, current homeowners, and those who want to get into the real estate market in these states.
Marijuana legalization on the industrial marketplace
While home prices have increased with the opening of marijuana dispensaries, industrial property demand is also skyrocketing. In order to satiate the appetite for marijuana, cannabis-based products, and full-spectrum CBD oil, new farms, and processing centers are opening, with more than enough manpower to join the business ventures.
The industrial real estate demand has been well documented, dating back to when the first states legalized marijuana for adult consumption. A 2017 article in The New York Times summed up how new businesses are demanding space: “In the more than two dozen states that have moved to legalize pot, factories, warehouses, and self-storage facilities are being repurposed for the cultivation and processing of potent marijuana plants and products.”
Once again, a correlation can be drawn between states that legalize marijuana and demand for industrial space. According to a 2018 study completed by the National Association of Realtors, over one-third of members reported increased demand in warehouses, while 31 percent said they had increased demand for storefronts. Farmland isn’t immune to this trend: nearly one in five National Association of Realtors members said they saw an increased demand for open land.
Is it too late to join the marijuana real estate boom?
As the markets continue to heat up and demand grows, there’s never been a better time to join the marijuana real estate boom. With changing laws and regulations opening up to encourage business growth, the demand for real estate will only continue to climb.
However, there are many things to consider before investing in the space. With the National Association of Realtors reporting a slight perceived uptick in crime near dispensaries and personal marijuana growing creating new problems for homeowners and landlords, any new investors should consider the legal ramifications and potential value increase before purchasing any property. Investments may lose value, so it’s important to consult a realtor and attorney before putting any money down.