Does Marijuana Legalization Hurt Property Values?

For now, Green Thumb Industries is a rare thing in the ever-growing cannabis business: A big marijuana company, publicly traded and with a billionaire investor, that is not also Canadian.

The company says it has “consumer packaged products” in eight U.S. states — including New York, which thanks to its extremely limited medical marijuana program, has probably the most latent demand for marijuana of any state in the country — and was recently awarded five dispensary licenses in Ohio. Green Thumb is now setting its sights on New Jersey, where its plans are running into a novel argument: This big company, maybe possibly a candidate to become a U.S.-based cannabis unicorn with a massive valuation, stands accused of wrecking property values.

In a redux of a scene played out in numerous other states, New Jersey is in the midst of a frenzied stampede for lucrative marijuana cultivation licenses. The state’s Department of Health will issue just six permits to cultivate cannabis. One hundred and forty-six applicants are vying for one of these licenses, with 51 applicants angling for one of just two licenses in southern New Jersey alone, according to the Courier Post.

And in Clayton, a rural borough of rural Gloucester County, a Green Thumb proposal to build a $10 million, 50,000-square foot cultivation operation in an industrial park will also bring about the homeowner’s version of the apocalypse: It will destroy real-estate values, according to a committed drug warrior whose warnings were carried in the local newspaper.

“The argument isn’t about whether or not medical marijuana is a good thing, the question is, do YOU want to live next to a marijuana growing, processing and distribution operation, with the many proven negative impacts it will have on your home value, your childrens’ health and safety, and the environment,” reads the quote attributed to David G. Evans, a “special adviser” to the Drug Free America Foundation (and a reliable veteran anti-marijuana zealot) in the Clayton Free Press.

As the Philadelphia Inquirer noted, the industrial park in question currently houses a “hazardous-waste storage and transfer facility.”

It is not clear what data or studies Evans is using to back his assertion that an investment by a for-profit company that will require jobs to build and run it will depress property values — which typically rise when a large source of money and jobs enters the neighborhood.

For his part, Kevin Nesko, who publishes the Clayton Free Press, said in comments to the Inquirer that he quoted Evans because of his “knowledge,” and that pro-marijuana advocates contacted for the article did not “back their statements with information or statistics.”

Compare this situation, if you will, of that in Denver, where Evans’s fellow travelers in the anti-legalization world have pinned the blame on marijuana legalization for a very different societal ill: For causing homelessness to spike, in part because the marijuana industry has caused housing prices to rise.

While it is true that Denver has added 100,000 people amid a housing and gentrification boom that coincides with its legalization experiment, similarly, there is little evidence of a direct, causal link between homelessness and legalization. On the other hand, a study did find a link between recreational marijuana dispensaries and rising home prices. According to researchers from the University of Wisconsin at Madison, homes in Colorado within a tenth of a mile of a dispensary saw their home values rise by 8.4 percent.

So which is it? Does marijuana cause housing prices to plummet, or to spike? As Evans’s display indicates, the answer is whatever — say whatever, in front of whatever audience, in order to get the result you want (which is no marijuana industry, anywhere, ever).

And if that doesn’t work — and in the case of Clayton, where local officials have approved Green Thumb Industries’ plan, it might not — you can always threaten to sue. (Which he did.)

TELL US, do you think marijuana legalization influences real estate values?