How Cannabis Elevates Real Estate Prices

How Cannabis Elevates Real Estate Prices – Signs of the Times!

There once was a time where the appearance of a Starbucks or a Trade Joes, or a Whole Foods in a neighborhood was the determining factor that the community is on the rise. However, these days the appearance of a cannabis dispensary is achieving the same results.

While some people have complained about “cannabis business driving down real estate prices”, the statistics tell us something different. You see, when a cannabis dispensary comes to your neighborhood, it brings commerce. It brings employment, it reduces street dealings and once completely legal…will reduce crime as well.

But how does cannabis actually increase the real estate value? Let’s take a closer look.

Commercial Properties

One thing that cannabis is doing for the real estate market is its buying up old unwanted real estate. Things like abandoned warehouses or strip malls become excellent spaces for running a cannabis business.

Furthermore, with the current banking regulations in place, many cannabis entrepreneurs are investing into real estate as it’s an asset that doesn’t depreciate over time like stocks or bonds. It’s a safe place for them to “store” their money or invest into new locations for their businesses.

Additionally, many dispensary owners often face elevated rent prices because there still is some sort of risk when allowing cannabis businesses to operate on your property. Many cannabis business owners are now buying up land to become landlords themselves. They then rent out to other businesses with reasonable monthly dues. All of these aspects combined is a direct result of cannabis legalization.

In conclusion, the commercial value of real estate in places where cannabis is legal is increasing significantly.

The Impact of Cannabis on Residential Properties

One would think that legalizing cannabis could have a negative impact on property sales within residential areas, however this is far from the truth. The reality is that when cannabis businesses open up in your neighborhood, it creates jobs.

Job seekers then go out and purchase houses within the area, in turn elevating the real estate value of houses in the area.

Colorado is one of the best markets to see the results in action. From 2014 – 2016 the average house value went up about $50,000 USD. This can be traced directly due to the legalization of marijuana in the area.

What about Crime?

One of the biggest concerns for homeowners when cannabis is legalized is the increase of crime. This of course hasn’t occurred under legal marijuana. In fact, depending on which study you look at, the City of Denver, CO saw a 44% drop in crime post-legalization.

Cannabis related crimes only made up about 1% of all reported crimes, meaning that there is no correlation between legalizing marijuana and higher crime rates.

In fact, one could argue that by taking the cannabis market out of the black market and legitimizing it, you’re reducing crime and increasing the property values within the area.

A Big Opportunity Arises

For folks who are Realtors, this is actually a great opportunity. The legality of cannabis on a federal level is not too far off in the future. Within the next few years, or potentially by the end of 2019, marijuana could be legal on a federal level.

Once this occurs, we’ll see a flood of entrepreneurs doing everything in their power to gain some market ground. The smart Realtors would position themselves in such a way to identify ideal properties for cannabis-related businesses.

There will be a massive boon in the near future in relation to cannabis real estate over the next five years.

Top Take Aways

So let’s recap.

Cannabis increases commercial property value because the industry is seeking out unused commercial properties for activities such as selling, growing and manufacturing cannabis related products.
Residential property increases in value because cannabis businesses bring in new jobs and job seekers. These seekers are in the market for buying houses. Additionally, the legality of cannabis has a direct impact on crime, creating more market appeal.
The Smart Money is on Cannabis Related Real Estate. For those who have access to properties, holding off until cannabis legalizes at a federal level will be a sure way to make significant returns on your investments.

Final Thoughts

I think it’s important that we take a look at the impact of cannabis on markets such as real estate. We are entering into the golden age of marijuana and I think that these types of discussions will become more prominent over the coming months.

I’m sure there is some genius sitting on a bunch of old factories just waiting for the floodgates to open. If not, you could be that genius.

The world is ready for full-scale cannabis…so maybe it’s time to start thinking about ‘where’ those cannabis businesses will be located at and to turn profit on the changing of the tides.