In Colorado, homes near marijuana dispensaries saw their values increase relative to comparable homes farther away from them. Some experts are calling this spike in home valuation a 'contact high' according to the Colorado Springs Independent. The author is claiming that both variables are correlated, not that one is causative of another.
In the span from 2013 through 2014 (so, directly before and after Colorado’s Amendment 64, legalizing recreational marijuana, went into effect), the researchers compared the value of homes within .1 mile of a pot shop to those farther away. “Our results indicate that retail conversion has a large positive impact on neighboring property values after controlling for property attributes and neighborhood characteristics,” they wrote.
What is a retail conversion?
A “retail conversion” refers to a medical marijuana dispensary that was converted to recreational in the beginning of 2014. Remember that in the early days, only medical license holders were allowed to get into retail sales, so all of the first pot shops were “conversions.”
What is the right distance to get the most added value?
According to the Marijuana Enforcement Division (MED) of Colorado’s Department of Revenue, 103 such licenses were issued in the first year of retail sales in Denver.In particular, the report found that single-family residences within .1 mile of a retail conversion increased in value by over 8 percent more relative to comparable properties farther away (between .1 and .25 mile away) over that year. That’s an average of almost $27,000 in added value, whereas homes more than .1 mile away from a conversion weren’t impacted.