Nearly five years have passed since voters approved Proposition 64, and recreational cannabis has been legal in California since Jan. 1, 2018—yet some people continue to spread negative myths and mistruths regarding legal cannabis businesses.
One of the most pervasive mistruths: Cannabis is bad for property values. In reality, nothing could be further from the truth.
City councils were (and are) given a difficult task: They are asked to decide whether to allow commercial cannabis activity in their city, and if so, they then have to figure out where those businesses can operate. Desert Hot Springs, Palm Springs, Cathedral City, Palm Desert and Coachella allow at least some parts of the cannabis supply chain; the other four Coachella Valley cities do not.
These zoning conversations often include discussions about fears of nuisance behaviors and an increase in violent crime. Take, for example, a 2018 article in The Desert Sun regarding the city of Indio’s opposition to a cannabis retail store the city of Coachella had allowed near the border between the two cities. The story says: “Indio repeated concerns about the dispensary’s proximity to Martin van Buren Elementary School, a farmworker housing complex and a service and shelter facility for the homeless, ‘among other sensitive uses.’ In addition, the complaint expressed concerns regarding ‘the increased odor from the cultivation and use of cannabis.’”
To date, none of these fears has come to fruition.
Nonetheless, these fears often make city councils enact zoning laws that are quite restrictive, allowing cannabis businesses in only small slivers of a city, or in marginal areas with less infrastructure and little to no foot traffic. In some cases, cities have made mistakes by forcing cannabis businesses into industrial areas—or putting them closest to poorer, underserved neighborhoods.
However, the research is in—and various studies show that cannabis businesses are actually quite good for property values. A recent review of 42 key research studies by Leafly data analysts found that cannabis retail stores generally improve public safety and nearby property values. The broad body of published research from states such as Colorado and Washington has shown that property values increase when legal cannabis is allowed.
For example, a recent study by Clever, an online real estate referral service, found that between 2017 and 2019, home values increased $6,300-plus more in cities where recreational cannabis is legal than in cities where it is not legal (while controlling for population, initial home values and other factors). This conclusion was based on data provided by popular real estate website Zillow. The appreciation of property values was even more significant in those places where cannabis retail stores were easily accessible—much like property that is close to hip restaurants and bars tends to be more valuable.
As for crime rates, the allowance of adult-use cannabis seems to have little to no effect. Many studies, including one from the American Journal of Preventive Medicine, found no increase in crime related to the location of cannabis stores. This makes logical sense when you realize that many stores have opened in previously empty storefronts, with the businesses pouring many thousands dollars into renovation, lighting and security. Bright attractive retail stores, more eyes on the street and more activity all lead to safer streets. Locally, the owners of the Four Twenty Bank and Lounge on South Palm Canyon Drive in downtown Palm Springs spent more than $1 million to renovate a space that had been shuttered for more than two decades, bringing the building up to code and into compliance with city standards.
Additionally, cannabis taxes have been used to improve city infrastructure, hire more public safety personnel, open more amenities and improve the quality of life. Cannabis-tax revenue has already helped the city of Desert Hot Springs—with more than $4 million added to city coffers in 2020 alone—pay for a new City Hall, a library and better roads, as well as more police officers. Housing developers are now eyeing the area, as the industry has created an estimated 2,300 new jobs in DHS.
Yes, cannabis remains the subject of a lot of stigma—but it would be wise for cities to consider the realities of cannabis businesses, like increasing property values, more vibrant and safer streets, and higher local employment.