Cannabis and real estate: threat or opportunity?
With the legalization of cannabis in more and more US states, an exciting question arises: Do cannabis dispensaries affect the value of residential property? While critics often argue with crime and falling prices, current figures show a much more nuanced picture.
New studies: Houses next to dispensaries are worth more
An analysis of real estate developments in Colorado, Michigan and Oregon shows: When a cannabis store opens in a neighborhood, property values increase by an additional $4,400 per year on average.
This contradicts older studies (e.g. from Washington State, 2012), which predicted even lower values in the immediate vicinity.
Why are prices rising despite prejudices?
Dispensaries are often located in districts with lower entry-level prices. However, it is precisely there that above-average growth rates can be seen:
Denver, CO: Properties in neighborhoods with stores were 80% below the city average. Since 2020, however, they have risen 6.9 percentage points faster – an average of +$123,000 in four years.
Detroit, MI: Homes near dispensaries nearly doubled in value (from $38,000 to $70,000 since 2020).
Kalamazoo & Grand Rapids, MI: Price increases 3-9 percentage points higher than other neighborhoods.
Dispensaries therefore often act as an economic stimulus in less sought-after areas.
Not every cannabis store is the same:
Simple stores can still cause skepticism.
High-quality stores with design, security staff and clear community rules enhance neighborhoods – comparable to microbreweries, cafés or hip concept stores.
Take Boulder, CO, for example: Real estate in Zipcodes with a dispensary is even more expensive ($1.5 million) than in areas without.
Positive side effects for cities
Dispensaries pay high taxes, which flow into education, health and infrastructure – all factors that make residential areas more attractive and stabilize or increase property values.
In the Portland area (Cornelius, OR), for example, home values have grown by 23% since 2021, almost twice as much as the city average.
But: There are also exceptions
Prices are not rising everywhere:
Ann Arbor, MI: After the first stores opened in 2023, prices fell slightly (-0.84 %), while the rest of the city grew by +6.6 %.
Portland has also seen stagnation over several years in some cases.
The effect is therefore not automatically guaranteed – it depends heavily on the location, environment and economic dynamics.
Conclusion: More opportunities than risks
With almost 15,000 dispensaries in the USA, there is a clear trend: real estate in their vicinity does not lose value, but often gains.
On average, a new cannabis store means higher demand, more tax revenue and more stable prices – even if there are exceptions.
👉 So if you own a home in a legalized federal state, you can rejoice: a dispensary nearby could mean hard cash in the end.
Source: https://tomo.com/blog/retail-marijuana-dispensaries-could-drive-higher-home-value/