Analysis by a real estate platform indicates from 2009 to 2024, home values in the USA increased more in states where cannabis is legal for medicinal or recreational use.
CleverOffers used the Zillow Home Value Index and several other sources to compare changes to home values in legal cannabis states compared to those where it remains illegal, and came up with some interesting results.
- Home values increased $60,327 more in states where marijuana is currently legal for recreational use (about 39% more).
- Home values increased $22,185 more in states where medicinal marijuana is now legal (about 18% more).
- Of the 10 states with the biggest increases in home values since 2009, nine of them have legalized cannabis in some form.
- Nine of the 10 states with the lowest home value growth since 2009 have not legalized cannabis for recreational use.
But why?
While correlation does not imply causation, Clever Offers says legalization is a factor. For example, states where cannabis is legal reap millions in tax revenue reinvested into public programs that make neighborhoods more desirable and valuable to home buyers.
The analysis notes the 23 states taxing recreational or medicinal marijuana sales in 2024 collected more than $4 billion in sales tax revenue; most of that through recreational marijuana sales. California collected the most tax revenue, racking up more than $1 billion, and California saw the highest increase in home value, increasing $492,520 from 2009 to 2024.
“Despite lingering stereotypes and outdated fears, misconceptions about cannabis legalization and its effect on the housing market are finally fading,” states the analysis. “Cannabis isn’t dragging down home values. It’s helping them grow, and states that have yet to legalize it are missing out on thousands in potential home value appreciation.”
The CleverOffers analysis has some common ground with a 2022 study out of MIT, but with an important difference.
“In the state-level analysis, we found that home values decrease in the years immediately following the legalization of medical marijuana; however, this may be due to spillover pre-trends. For recreational marijuana, however, housing prices increase
in the years following legalization.”
