What Is Legal Marijuana’s Effect on the Real Estate Market?

[Published June 18, 2015, in the Jeffco editions of the Denver Post's YourHub section and in four Jefferson County weekly newspapers]

It’s time to recognize that legalized marijuana has had an effect on the metro area’s real estate market. Although our agents haven’t encountered many out-of-state buyers who are moving here because of legalization, we do see an impact on the overall real estate market. There’s probably more impact in Denver, where recreational marijuana shops are growing like… weeds.

The biggest impact seems to be in the non-residential market. Long vacant warehouse space is being snapped up by growers, since the cultivation of marijuana is definitely an indoor affair.  The surge in grow operations has also been a boon for HVAC, plumbing and electrical contractors, according to a June 4th CNN Money report.

 

My guess (since documentation is hard to come by) is that the influx of new residents from other states is impacting the rental market more than the for-sale market — for now. Later on, I expect many of those renters will want to become homeowners.

 

I also surmise that most of the new residents are moving here to work in the marijuana industry, not merely to consume legal marijuana. Given how easy it is to obtain marijuana in states where it is illegal, I don’t think anyone would move here to buy it legally.

I also agree with Gov. Hickenlooper’s assessment that legalization has not led to Coloradans taking up marijuana who weren’t already users. Rather, it has diverted existing users into legal channels.  

At this point, I’d have to conclude that legalized marijuana has stimulated our economy, and the real estate market is sharing in the effects of it.