While it’s often believed that letting cannabis stores open in a neighborhood will drive down property values, a new report from real estate company Tomo says not so fast.
Instead, Tomo found that, on average, if a dispensary opens in your area, you’re likely to see an additional $4,400 increase in your property value each year.
The firm said in the report that it assessed various factors that cause real estate prices to fluctuate in Colorado, Michigan, and Oregon – states where cannabis is legal and available from storefront merchants, with enough time in-market to identify the pre- and post-legalization impacts of recreational cannabis dispensaries on home prices.
The report also looked at the annual increase (or decrease) in median home prices in ZIP codes with a dispensary, compared to median home price changes in the surrounding ZIP codes, and aggregated findings across cities in multiple states to uncover the trends.
Higher valuations
A key factor in the report’s results is the fact that dispensaries are often relegated to less desirable parts of cities, often due to proximity restrictions with churches and schools. Median incomes in these neighborhoods were lower that other neighborhoods, which often resulted in lower home valuations.
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