Go for it: A recent analysis of sales data found that home values have increased an additional $ 17,113 over the past four years in states where recreational marijuana is legal.
If you are a homeowner who would like to see the value of your home grow like a weed, instead of going for the weed killer, you should go for killer grass.
A recent report from Real Estate Witch, an affiliate of online real estate listing service Clever Real Estate, found that in states across the country, the legalization of marijuana correlated with higher real estate values and millions of dollars in new tax revenues. Between April 2017 and April 2021, property values increased by $ 17,113 more in states where recreational marijuana is legal, compared to those where it is illegal or is only legal for recreational purposes. medical, according to the report.
Home values have seen serious increases in cities with marijuana dispensaries compared to those without. In fact, with each new dispensary added to a city, Real Estate Witch discovered that property values increased by $ 519. The figures in the report are based on regression analysis of publicly available home value data from Zillow and population data from the US Census Bureau.
But Philadelphia doesn’t have a single recreational marijuana dispensary. In order to legally roll a joint in Pennsylvania, residents must register with the Commonwealth, have a doctor certify their eligibility, pay for a medical marijuana ID card, and purchase their ‘weed’ at one. of the few legal dispensaries in the state. Last year, Pennsylvania police made more than 20,000 arrests for possession of marijuana. And as neighboring states like New York and New Jersey legalize, cannabis tourists from Pennsylvania – and thousands of their dollars – will soon be pouring into the legal weed market.
Now, the report says, you can add the value of your home to the losses Pennsylvania residents will rack up as recreational weeds remain illegal.
But what does weed have to do with the value of your home anyway? While marijuana can be magical in some ways, it can’t just increase property values on its own.
Francesca Ortegren, data scientist at Clever, highlights the economic activity that accompanies legal weed to explain the relationship between house values and legal marijuana. “There are jobs created [and] there is more money put into the state because the taxes tend to be quite high on recreational purchases, ”Ortegren says. “It really drives up the values of the house. “
The economic activity that drives up home values comes in both “predictable” and “surprising” ways. Legal marijuana, for example, creates jobs. According to Leafly, a website that connects users to legal and licensed marijuana dealers, the legal marijuana industry supported 321,000 jobs at the start of 2021. By comparison, that’s more than 1.5 times the number of practicing dentists in the United States.
Not only are jobs created in the marijuana industry, but legal weed is also attracting tourists and other accommodation to support the new economy. After Colorado became the first state to legalize the plant for recreational use, hotel revenues soared nearly $ 130 million. The new jobs mean new residents are moving to the city, new visitors are spending money (on cannabis and other things), and most importantly, new tax revenue.
For Lieutenant Governor John Fetterman, a longtime supporter of the legalization of marijuana in Pennsylvania, the decision is “no brainer.”
“There is clear evidence that legalizing weed creates an economic boom for jobs, incomes and businesses,” says Fetterman, “These things are often strongly correlated with increasing property values and a greater economic development. “
For Fetterman, one of the main reasons for legalizing marijuana is tax revenue, which could be used to solve problems and improve public goods. He gives the example of the use of taxpayer dollars from marijuana to repair the deteriorating infrastructure of the Commonwealth. “Pot for the potholes” is what he calls it.
Source: Real Estate Witch report, July 2021
These improvements help to make towns, villages and neighborhoods more attractive, increasing the value of the properties within them. States that have legalized weed have funneled taxpayer dollars into education programs, public health and safety initiatives, transportation and infrastructure, and environmental conservation efforts, to mention just a few examples. As Fetterman rhetorically asks, “Who doesn’t need a few hundred million more dollars in literally free money?” “
Real Estate Witch also reports that in municipalities where marijuana is completely legal, crime rates have dropped as police no longer need to prosecute minor marijuana offenses. The available marijuana also means better access to care for people with chronic pain, and it may even be a way to reduce alcohol-related illness and death. Go ahead, if you want.
So why hasn’t Pennsylvania legalized? Fetterman points to the lingering partisan hostility in Harrisburg. While a qualified majority of Democrats and many Republicans are on board, a small sect of Republicans in the state capital remains opposed, putting an indefinite blockade on any progress. Fetterman blames a refusal to let Democrats “win” or the fear of “reef madness.”
Legalization is on the horizon, however; Fetterman says it’s inevitable. Last February, Republican State Senator Dan Laughlin of Erie, joined by Democratic State Senator from Philly, Sharif Street, introduced a bill in Harrisburg that would finally legalize recreational marijuana. The new legislation would allow residents over the age of 21 to own 30 grams of cannabis flowers (which is equivalent to about an ounce of weed to smoke). It would also free anyone incarcerated for non-violent marijuana-related offenses and clear the records of those convicted of minor marijuana-related crimes. Under this law, medical dispensaries in Pennsylvania would be allowed to transition to recreational selling.
But until the bill becomes law, Pennsylvania’s economy and real estate market could continue to fail.
“Pennsylvania only hurts itself every week that goes by that we don’t have this conversation in a serious and serious way,” Fetterman said. He mentions the thousands of people charged each year with marijuana-related offenses and the millions of dollars poured into the economies of neighboring states like New Jersey.
The Real Estate Witch report backs Fetterman’s concerns. In 2020, New Jersey collected nearly $ 159 million in marijuana tax revenue. Pennsylvania raised $ 0. In New Jersey, home values increased by more than $ 82,000 between 2017 and 2021, compared to $ 35,527 in Pennsylvania. While many factors are driving changes like these, Ortegren sees the massive increase in revenue from marijuana sales as the primary driver. More legal weed seems to equal more money for better schools, better infrastructure, and ultimately neighborhoods with higher residential values.
Ultimately, Fetterman views legal weed as a net positive for everyone, even in the most unexpected ways. “As a freedom-loving conservative or a cannabis-loving liberal, whatever it is, wherever you come from [from], there is something for everyone here.