{"id":3220,"date":"2017-11-17T09:39:06","date_gmt":"2017-11-17T13:39:06","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=3220"},"modified":"2018-09-19T06:16:35","modified_gmt":"2018-09-19T10:16:35","slug":"marijuanas-high-home-values","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2017\/11\/17\/marijuanas-high-home-values\/","title":{"rendered":"Marijuana’s high home values"},"content":{"rendered":"
\"high<\/a>
Weed makes home values high? (infographic from gobankingrates.com)<\/figcaption><\/figure>\n

Did you know that the licensing of medical marijuana dispensaries in Maryland<\/a> has begun?\u00a0 There are only a handful of licensed dispensaries at this time, including one in Montgomery County.\u00a0 Besides dispensaries, Maryland\u2019s budding medical marijuana industry includes growers and processors.\u00a0 Even though the industry is just taking off, there is growing support for legalizing marijuana for recreational use.\u00a0 This is evidenced by recent bills introduced in the Maryland General Assembly<\/a> that focused on establishing a tax for cannabis sales.\u00a0 Besides increasing tax revenue for states where marijuana is decriminalized, there also seems to be a phenomenon of high home values.<\/p>\n

If Maryland does decriminalize marijuana, it could be a potential source of tax.\u00a0 The San Francisco Chronicle (6 lessons from legal pot in Washington and Colorado<\/a>; sfchronicle.com; September 30, 2016)<\/em>\u00a0\u00a0 pointed out that the state of Washington has had a windfall since legalizing pot.\u00a0 It was reported that Washington collected $135 million for the fiscal year 2015 and $186 million for the fiscal year 2016.\u00a0 They were expected a fifty percent for the fiscal year 2017.\u00a0 And that is just on the excise tax on pot products, and doesn\u2019t include the collected sales tax.<\/p>\n

About those high home values…<\/h3>\n

Colorado and Washington state have realized a significant housing boom since decriminalizing marijuana.\u00a0 Washington DC\u2019s housing market has been buzzing along quite nicely as well.\u00a0 While the surrounding suburbs’ housing market has slowed, GCAAR\u2019s October stats (gcarr.com) reveal that Washington DC\u2019s home sales have surged about ten percent year-to-date and average home sale prices grew about four percent!\u00a0 Recent empirical studies have validated the housing-marijuana relationship.<\/p>\n

One recent paper that provides such evidence was presented at the 2017 Annual Meeting of the Allied Social Sciences Associations held by the American Economic Association.\u00a0 Cheng, Mayer and Mayer (The Effect of Legalizing Retail Marijuana on Housing Values: Evidence from Colorado<\/em><\/a>; working paper, 2016) measured the \u201cbenefits and costs\u201d of legalizing marijuana expressed in home prices.\u00a0 They concede that although marijuana legalization is controversial, there are some benefits.\u00a0 They determined that there is a causal effect such that Colorado\u2019s retail marijuana law implementation was instrumental in its recent housing boom.\u00a0 They concluded that implementing a retail marijuana law will give home prices a bump of about six percent.\u00a0 They also found that high home values and inventory are mutually exclusive, such that the increase in housing demand did not affect housing supply.<\/p>\n

Are high home values worth the affects of decriminalizing pot?\u00a0 High home values is not everything.<\/h3>\n

Regardless of high home values, decriminalizing marijuana is not all peaches and cream.\u00a0 Not to be a buzzkill, marijuana can also negatively impact real estate too.\u00a0 Amy Hoak\u2019s reporting lists a number of issues where legalizing marijuana has adverse effects to housing (5 ways marijuana legalization affects real estate<\/em><\/a>; MarketWatch.com; November 25, 2014).<\/p>\n

A major issue Hoak points out concerns federal law.\u00a0 Regardless of any state or local retail marijuana law, the Feds still consider marijuana verboten<\/em>.\u00a0 Properties (commercial or residential) that are associated with marijuana related activities and can be subjected to civil asset forfeiture.\u00a0 Another issue is financing properties related to the marijuana industry.\u00a0 Federally chartered banks conform to federal law and won\u2019t lend on these properties.<\/p>\n

Hoak also points out issues with properties where marijuana is processed, sold or used (commercial or residential).\u00a0 There has been a significant increase in property explosions in states where marijuana has been decriminalized.\u00a0 The explosions are likely due to processing marijuana into hash oil, a process that involves butane.\u00a0 Mold is an issue where marijuana is grown, because of the large amounts of water used in the process.\u00a0 Much like cigarette smoke, marijuana odors can permeate walls and be very difficult to remove.\u00a0 Even if a lease forbids it, residential landlords can have problems when tenants grow, process, and smoke marijuana in the home.<\/p>\n

Regardless of the increased home value phenomenon associated with retail marijuana laws, some homes can be difficult to sell.\u00a0 High home values aside, homes that have been \u201ctainted\u201d with odors or mold can languish on the market, even if they are in prime locations.\u00a0 Finally, Hoak pointed out that people are not keen living next to properties involved in the marijuana industry.<\/p>\n

Original published at https:\/\/dankrell.com\/blog\/2017\/11\/17\/marijuanas-high-home-values\/<\/p>\n

Copyright\u00a9 Dan Krell
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\nDisclaimer<\/a>. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

Did you know that the licensing of medical marijuana dispensaries in Maryland has begun?\u00a0 There are only a handful of licensed dispensaries at this time, including one in Montgomery County.\u00a0 Besides dispensaries, Maryland\u2019s budding medical marijuana industry includes growers and processors.\u00a0 Even though the industry is just taking off, there is growing support for legalizing … <\/p>\n

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