Regardless of their political party, the majority of Americans support cannabis legalization. According to a 2019 Pew Research Center survey, 55% of Republicans and 78% of Democrats agreed that marijuana “should be made legal.” Overall, 67% of Americans want to see cannabis legalized. Only 32% think that cannabis “should not be made legal.”
The American public’s evolving position on cannabis legalization could have significant ramifications for 2020 state electrons and the demand for cannabis real estate.
The Effect of Cannabis Legalization on Real Estate
When Americans consider the effects of cannabis legalization, they rarely think about whether updating laws will raise or lower real estate values. Cannabis entrepreneurs, however, need to take changes in cannabis real estate seriously. Deciding when to purchase land and buildings could partially determine whether companies succeed or fail.
Colorado, one of the first states to legalize recreational cannabis, offers an excellent case study that could predict how changing laws affect real estate prices.
One study finds that Colorado’s decision to legalize marijuana helped increase home values by 6%, which comes to about $15,600 per property. Legalization may contribute to higher values because it creates a new industry and jobs, attracts job seekers, and encourages investors to spend money on property.
Interestingly, areas that legalize medical marijuana do not see such a significant jump in property values as those that legalize recreational cannabis.
How Legalization May Influence Cannabis Real Estate Investors
Considering that property values increase after legalization, it makes sense for cannabis real estate investors to purchase land and buildings before states change their laws. A storefront that costs $250,000 before legalization could easily reach $265,000 after legalization.
Unfortunately, researchers haven’t spent as much time studying the impact of cannabis legalization on farmland. One could assume, though, that farm prices will go up as more investors purchase land for growing cannabis.
2020 State Elections That May Lead to Cannabis Legalization
Cannabis investors should pay close attention to 2020 state elections that will affect cannabis legalization. The closer a state comes to recreational legalization, the more expensive property will probably become.
Every investor will need to gauge the landscape to determine the right time to buy land and pour money into the equipment, infrastructure, and employees. Paying attention to 2020 state elections may play a crucial role in when entrepreneurs decide to invest.
States That May Pass Medical Cannabis Laws in 2020
So far, medical marijuana hasn’t had much of an influence on real estate prices. States that pass medical cannabis laws, though, have taken a first step toward full legalization. Once they find that medical use benefits people more than harms them, it becomes easier to make recreational cannabis easier.
Regions with recreational cannabis surround Idaho. The state’s government has resisted pressure to conform to its neighbors’ laws.
The 2020 election, however, may include a ballot initiative that would let Idaho residents decide whether they want to legalize medical marijuana.
As of March 2020, Kansas has some of the country’s strictest marijuana laws. Governor Laura Kelly, who took office in 2019, supports medical cannabis, though. Kansas’s Senate and House have Republican leaders who do not support the governor on her position. This creates a tense situation that could influence how people choose to vote in 2020.
Kansas has been put in an odd position, geographically. It shares borders with Colorado, which has fully legalized cannabis; Missouri, which has medical cannabis and decriminalized recreational use; Oklahoma, where patients can access medical marijuana but authorities can prosecute recreational users; and Nebraska, which has decriminalized personal cannabis use even though it does not have medical marijuana.
Mississippi’s cannabis advocates are encouraging residents to support a ballot initiative that would let them, the voters, decide whether the state adopts medical marijuana. Note that winning would not legalize medical marijuana. It would just give residents the right to vote for or against legalization. Still, it’s a big step forward for the state.
States That May Pass Recreational Cannabis Laws in 2020
Some states that allow medical marijuana could begin the transition to recreational cannabis after the 2020 elections. Depending on the state, recreational cannabis laws will depend on voter initiatives and who wins elections.
Arizona failed to pass a ballot initiative by just 3% in 2016. Assuming that supporters can get at least 237,645 signatures, a new initiative will appear on the 2020 ballot.
Interestingly, some cannabis groups oppose the initiative, so the ballot may have two options for voters to consider.
New Mexico always seems on the cusp of legalizing recreational cannabis. Governor Michelle Lujan Grisham already had a task force to create a blueprint for legalization. The House passed a law that would let adults consume cannabis legally.
New Mexico’s Senate, however, remains skeptical. Without the Senate’s support, New Mexico will not pass new cannabis laws in 2020. That means that the 2020 Senate races could determine the fate of legalization in New Mexico. If the skeptics lose their positions, the state could start passing updated laws.
New Jersey fell short of passing recreational cannabis laws in 2019. In 2020, voters will get a chance to have their say.
One poll shows that 62% of New Jersey residents support legalization. Only 32% oppose it. The 2019 version of the survey showed 59% support. The slight increase could give the state enough votes to enact recreational cannabis laws. Legalization will likely depend on whether people turn up to vote.
Most politicians in New York seem to agree that the state needs to pass recreational cannabis laws. New York, however, failed to reach this goal in 2019. The issue isn’t so much whether the state supports recreational legalization, but how to write laws that would promote social justice during the legalization process.
If Governor Andrew Cuomo gets his way, New York will set aside 50% of cannabis tax revenue to invest in communities that have been disproportionately harmed by prohibition.
New York’s passing recreational cannabis could stimulate Connecticut to follow its neighbor’s lead. Currently, it seems unlikely that Governor Ned Lamont will stick his neck out to support legalization. If New York chooses legalization, though, it will become less risky for Lamont to do the same. It’s a long-shot, but it’s possible.
Most states have some form of legal marijuana. The influence of cannabis on real estate prices doesn’t become significant, though, until states pass recreational marijuana laws. Once that happens, the industry starts to attract more investors, which can drive up the price of buildings, farmland, equipment, and employees.
Every investment requires some level of risk. Whether buying cannabis real estate now will lead to future profits largely depends on predicting how voters will respond to the country’s evolving beliefs.