Report: Cannabis Legalization Boosts Home Values In Many States With Black Residents

States with the highest increase in home values tended to have smaller Black populations.

In a surprising new development, Black pot smokers may get an extra buzz from a rise in their home values courtesy of cannabis legalization.

Fresh data reveal that Nevada, Arizona, and California, in 2024, respectively, were the top three states where the gains occurred. Home appreciation rates in those areas (see chart below) where Black Americans live rose robustly, ranging from 158% to 188%.

The gains are intriguing as they contradict obsolete fears and ongoing stereotypes that legalized weed use by adults can decrease home values.

Clever Offers supplied BLACK ENTERPRISE with research that rejects those claims. Some observers have maintained that legalizing marijuana might spur unfavorable forces like higher crime and home depreciation.

Jaime Dunaway-Seale, a content writer for Clever Real Estate, shared her take tied to the Black community after authoring this report. That analysis revealed that from 2009 to 2024, home values surged $60,327 more in states where recreational marijuana is now legal versus states where it is not legal. (Clever Offers is a platform owned by Clever Real Estate.)

Pot legalization is not the lone reason for property values, but it is a contributing factor. According to the report, “States that have given it the green light reap millions in tax revenue that is reinvested into public programs that make neighborhoods more desirable—and more valuable—to home buyers.”

Demographically, Dunaway-Seale says states with the highest percentage change in home values tended to have smaller Black populations. Several variables, including a thriving economy and, to some extent, cannabis legalization, may be fueling the rising home values in those states.

“There’s a pretty common argument that cannabis legalization and dispensaries in neighborhoods would decrease property values, but our data shows that the opposite is true,” she says.

Conversely, she says states with large Black populations are typically less likely to have legalized marijuana and unlikely to have experienced high increases in home prices.

She pointed out that this is probably the case in those states because they are disproportionately located in the South. The reason: Those states tend to be more conservative and resist cannabis legalization due to religious reasons, historical stigma, and tough-on-crime policies.

Dunaway-Seale added that those states tend to have slower economic growth and less inbound migration, which keeps home values from rising.

“If cannabis were to be legalized for recreational use in these states, the tax revenue from sales could be reinvested into the community, again making homes in that area more desirable and worth more.”

Further, Dunaway-Seale provided commentary for the “bottom five” states with Black populations that had the lowest home value growth. They included Maryland, Delaware, and Illinois, all at 60%. Connecticut came in at 59% and Alaska was 49%.

She explained that although home values in these states get a boost from cannabis legalization, many other factors may keep home prices from soaring higher. Take Illinois, for instance. Dunaway-Seale says that the state has high taxes that may weaken demand for homes and keeps home prices from rising as high as in other states. As for Alaska, its cold temperatures and remote location, she says, means there is a lower demand to buy homes there.

Overall, 44 states have legalized cannabis in some form, such as recreational and medicinal use.

A glimpse at the top 10 states with Black residents where cannabis is fully legal, along with home value changes as of 2024.

State Black % of Population $ Change in Home Value % Home Value Change

Nevada 12.50% $296,493 188%

Arizona 6.70% $273,055 163%

California 7.20% $492,520 158%

Colorado 5.80% $336,774 146%

Montana 1.20% $271,611 145%

Michigan 15.30% $148,866 141%

Washington 6.20% $342,414 125%

Maine 2.60% $226,257 123%

Oregon 3.40% $275,826 118%

Massachusetts 10.30% $340,127 108%

Source: Clever Offers