Houses In Legal Marijuana States Are Worth More And Grow In Value Faster Than Those Where Criminalization Remains, Study Shows
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Home values have been climbing across the country in recent decades, but a new study finds that areas where adult-use marijuana is legal have seen especially high returns. Between 2009 and 2024, it says, home values in legal states increased by $60,327 more, on average, than home values in jurisdictions that still criminalize the drug.
All told, says the report, from real estate platform Clever Offers, states with recreational cannabis have seen average home values increase by $222,958 since 2009, while states without adult-use marijuana have seen average increases 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.
The findings suggest that some states could have seen even greater gains if they’d legalized marijuana sooner. “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.”
While the new report focuses mostly on adult-use cannabis, it also found that states where only medical marijuana is legal also saw greater increases in home prices. Between 2009 and 2024, the average home value increased by $22,185 more in medical marijuana states than in states where cannabis remains outlawed for medical use.
To be clear, “legalization is not the sole driver of property values, but it is a factor that is increasingly baked into the equation,” the report says. “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. Those with the lowest returns were Louisiana, West Virginia, Mississippi, Arkansas and Oklahoma.
Notably, while housing prices going up might benefit property owners, they can also put homeownership increasingly out of reach. Many of the states with the highest real estate increases, for instance, also boast some of the nation’s largest populations of homeless people.
The new Clever Offers report follows similar analyses from the real estate platform in past years. In 2023, for instance, Clever and others found that the average price of a home in a legalization state was 41 percent higher than those that still criminalize marijuana.
That earlier study explored average home prices from 2014 to 2023, looking at the potential impact of regulated cannabis access for medical or recreational purposes.
“It’s not surprising that states across the U.S. have seen significant increases in property values, given that the value of real estate generally increases over time,” that report said. “But the growing gap between home values in legal and illegal states sticks out like a green thumb.”
Authors of the earlier study didn’t attempt to dissect the reasons why legalization might be linked to increased home value, but multiple factors could be at play. Previous studies have indicated that regulated access could influence some people to move to certain states over others, for example.
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. “Home values increased $6,338 more in states where marijuana is legal in some form, compared to states that haven’t legalized marijuana,” that report concluded.
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.
Photo courtesy of M a n u e l.
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