In recent years, home values in the United States have risen across the board. However, a study found that those areas with legalized adult-use pot have experienced disproportionately high gains. It says that between 2009 and 2024 the home value of legal states will increase by an average $60,327 compared to home values for jurisdictions still penalizing marijuana.
According to a report by real estate platform, Clever Offers, the average home value in states that have legalized recreational marijuana has increased $222,958 between 2009 and 2016, while those without it have experienced an average increase of $162,631.
As of 2024, the average house in a state with adult-use marijuana was worth $447,635, the company’s analysis found—about 39 percent more than the average house price of $320,904 in states without recreational cannabis.
Looking at the ten states with the greatest real estate price hikes since 2009, Clever Offers noted, all but one—Idaho—legalized marijuana during the study period. Among the ten states with the lowest home value growth, meanwhile, all but one—Illinois—kept recreational cannabis illegal.
Findings suggest some states would have gained more if they had legalized marijuana earlier. “Had Ohio, Minnesota, and Delaware—the latest to legalize—done so when the first states, Colorado and Washington, did,” a company press release says, “their projected home values could be $96,890 higher on average today.”
In addition to focusing on states that only allow medical marijuana, the report found that those with higher home prices are in states where cannabis is still illegal for adult use. In the period between 2009 and 2024 there was a $22,185 increase in average home values in medical marijuana-legal states compared to states that still outlaw cannabis for medical purposes.
In the report, it’s stated that, while “legalization may not be the only factor driving property value, it certainly is one of the most important factors.” “States that have given it the green light reap millions in tax revenue that is reinvested into public programs that make neighborhoods more desirable—and more valuable—to home buyers.”
States with the highest home value increases during the study period included—in order—California, Hawaii, Washington State, Massachusetts and Colorado. Louisiana, West Virginia, Mississippi, Arkansas, and Oklahoma had the lowest return.
Even though rising house prices may be beneficial to property owners, it can make home ownership increasingly unattainable. Some of the most expensive states in the country also have the largest number of homeless.
In previous years, Clever Offers has conducted similar analysis. Clever and other companies found, for example, that in 2023 the average cost of a house was 41% higher than states which still penalize marijuana.
This study looked at average house prices between 2014 and 2023. It also considered the impact that regulated cannabis use for medical or recreational reasons could have on home values.
The report noted that “it’s no surprise that many U.S. states have experienced significant increases in the property value, since the price of real estate increases generally over time.” The growing difference between the home values of legal states and those in illegal ones is like a green finger.
The authors of the study did not attempt to analyze the factors that could influence the increase in home values. However, multiple factors may be involved. Previous studies showed that the regulated accessibility of marijuana could encourage people to choose certain states rather than others.
Prior analyses, including one published in 2021 that used data from online real estate marketplace Zillow, have similarly shown that marijuana legalization is associated with higher home property values. The report stated that “home values have increased by $6,338 when marijuana has been legalized in some way, in comparison to other states.”
In 2020, a separate analysis from economists at the University of Oklahoma similarly found that states that legalize marijuana see a boost in housing prices, with the effect most pronounced once nearby retail outlets open for business.
Image courtesy M a N u e L.
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