The cannabis industry has come a long way from the days when states that didn’t criminalize the controversial drug were the exception rather than the norm. Now, 36 states have legalized medical use, 15 allow recreational use, and several more are considering cannabis legalization for the future. The road to legalization wasn’t easy, however, with most opponents arguing legalization would increase crime rates as well as cannabis and subsequent drug use among children.
Years later, we can see that most of those fears were unfounded. However, although marijuana legalization policies haven’t increased criminal activity or youth drug use, they have had quite an interesting effect on real estate, a report from the National Association of Realtors (“NAR”) says. In states where medical and recreational marijuana has been legal for more than three years, there has been an increased demand for commercial properties, the report found.
More than 40% of the states saw an uptick in demand for warehouses, 27% saw an increase in demand for storefronts, and 21% saw an increase in demand for land. For the states that had allowed recreational and medical marijuana the longest, 32% saw commercial leases add addendums addressing growing cannabis while 30% saw addendums concerning cannabis sales.
The NAR report indicates more mixed results on the residential front; states that had legal cannabis markets the longest experienced a 27% drop in residential property values close to cannabis dispensaries while 12% of the states saw an increase in prices. The decreasing property values caused landlords to add addendums to lease agreements, with 58% to 67% of residential property managers in areas with legal recreational cannabis seeing lease addendums that restrict smoking on their premises.
In Colorado and Washington, two states that have relatively successful cannabis industries, an SSRN study indicates that some neighborhoods in both states saw a 7% increase in prices due to newly opened marijuana dispensaries. According to the research, the impact of cannabis legalization on more expensive homes was different from its impact on less-expensive homes, although homes in all price levels saw an increase in value.
As more states legalize cannabis, especially recreational use, real estate markets in these states may see an uptick in homebuyers, including cannabis consumers as well as job seekers. And with more dispensaries opening to cater to the increasing demand, they will need more labor, leading to more demand for homes as more individuals are employed and settle in. Such markets will inevitably be looking at increased property rates coupled with higher rents.
Away from the impact of marijuana on real estate, interesting things are happening as the industry matures. A case in point is RYAH Group Inc., a company that focuses on developing IoT devices that can measure out, remotely, the appropriate quantity of cannabis-based medicines.
NOTE TO INVESTORS: The latest news and updates relating to RYAH Group Inc. are available in the company’s newsroom at https://cnw.fm/RYAH
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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