In May, the State of Colorado legalized marijuana for recreational use by adults 21 and over. The first day of sales was celebrated with a lottery system, where those who purchased a ticket were able to buy the first $40 dollars worth of product, and then had to wait in line for up to two hours. The result was a huge demand for marijuana, which caused some stores to run out of product before they could sell out. And while this had a positive effect on the cannabis economy, it also caused a huge boom in home prices.
The cannabis industry has been growing rapidly in recent years, but thanks to the 2016 election it is now primed for a huge boom. With the election of Donald Trump, the cannabis industry has been given a huge boost, but there are still many hurdles to overcome. Many states have already legalized recreational cannabis, but over half of the country still remains on the fence. While there is no consensus on the issue, the majority of Americans have expressed their support for the legalization of recreational weed.
As many of you will know well, the cannabis industry is booming. The cannabis market in America is predicted to be worth $24 billion by 2020, and the global market is only set to overtake the US to become the largest illicit market in the world. So, how is this affecting home prices? Well, it is driving up demand for real estate as people try to secure a piece of the booming industry. But, very few people actually understand the market, and they believe that the legalization of cannabis has led to an increase in home prices.
According to a recent study, having access to marijuana may increase the value of your home.
If you’ve lately been looking for a new house, you’ve likely noticed that real estate prices have risen. This is especially true in places where marijuana is legal. However, with 91 percent of people in the United States supporting cannabis legalization, it will only expand throughout the nation, and there is no question that it will have an effect on real estate values.
According to a recent study by Clever Real Estate, real estate values in states that have legalized recreational cannabis increased $17,113 between April 2017 and April 2021, compared to places where usage is restricted to medicinal or is still illegal. Legalization of marijuana not only means greater property values, but it also means millions of dollars more in tax income.
According to the study, states that legalize recreational cannabis and allow more dispensaries to open have higher property values and tax revenues than those that do not allow cannabis shops to open or have restricted cannabis usage to medical reasons.
The results of the study are also intriguing. Property values increase by $519 every time a city adds a new dispensary, regardless of whether it is recreational or medical. In addition, between 2017 and 2019, home prices in legal states increased by $6, 338 more than in non-legal states. The greatest substantial gains in property prices were likewise seen in states that have legalized recreational cannabis.
Meanwhile, five states have officially approved the use of recreational marijuana, but they have yet to begin selling it. Once sales begin in these states, house prices are expected to rise by an average of $61,343. However, in states where recreational cannabis is legal, California has had the most increase in house prices, with a $128, 341 increase since 2017.
What exactly does it all imply?
Furthermore, communities with more shops had a positive connection with higher house prices, indicating that legalizing cannabis is a great way to promote economic development and employment creation.
Cannabis legalization has increased real estate prices, which is a good thing. Because increased tax revenues from cannabis sales lead to additional investment, particularly in infrastructure and public services, your cannabis sales taxes will undoubtedly contribute to the improvement of your community. All of this leads to greater demand for real estate, higher property prices, and more property tax income.
Other variables, however, have an effect on house prices. These factors, according to Clever Real Estate, include the property’s condition, features, facilities and services available in the neighborhood, and crime rates. Cannabis legalization may, of course, have an influence on all of these, but the effects are almost always positive: increased demand for real estate, tourism, and the development of new companies and employment. Consider Colorado, which was the first state to legalize recreational marijuana in 2012. This is why Colorado is usually held up as the gold standard when it comes to studying the effects of legalization on a state, and the results are always favorable.
According to a Penn State research, hotel revenues in Colorado increased by $130 million in the first year after marijuana was legalized. They also witnessed a decrease in crime rates, while the state saw a rise in new business-related employment development. Other beneficial impacts of legalization include improved access to medicine, less alcohol-related problems, and decreased imprisonment, all of which enhance the quality of life for people who live there.
The legalization of recreational marijuana has a significant effect on property prices.
According to Clever Real Estate, there are several kinds of cannabis legalization, all of which are related to higher property prices. However, according to their findings, recreational legalization has the greatest effect.
They found via a controlled research that real estate prices in regions where recreational cannabis is allowed increased by $17,113 when compared to areas where it is only authorized for medicinal use or is still prohibited. In comparison to places where cannabis is still banned, medicinal legalization boosted house prices by $1,543.
New York, New Mexico, Montana, Virginia, and Vermont are among the states that have recently legalized cannabis, and they may expect to see changes in property prices after their laws are fully implemented, especially if recreational marijuana is allowed. When they start selling marijuana, house prices will rise by more than $60,000 on average, but it could have risen to $61,343 if recreational cannabis was legalized in 2017, which is $7,302 more than the average home value gain of $54,041.
Dispensaries, both medical and recreational, have a significant effect on property prices in the states where they are situated.
When compared to states that currently have legal recreational use but no dispensaries, recreational usage may contribute as much as $22,090 in house selling gains.
Why is it significant?
This is critical because the economy needs some stimulation, particularly while the country recovers from the financial (not to mention emotional) effects of the epidemic. States do put cannabis sales revenues to good use, investing in infrastructure, public education, criminal justice reform, drug abuse treatment, and so much more. Furthermore, states have already made plans to transfer tax income to local governments, which contribute significantly to enhancing the quality of life in communities throughout the country.
Clever Real Estate supplied the data.
With the recent passage of the Cannabis Act, and the subsequent legalization of recreational marijuana use, Canada is finally able to experience the full benefits of this lucrative industry. With the market becoming more and more saturated, could this lead to an increase in home prices?. Read more about best stocks to buy now and let us know what you think.
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