Will Home Values Suffer if a Marijuana Grow Warehouse Opens Nearby?
Several large-scale pot growers are hoping to profit in the city of Sacramento soon, but their gains may mean losses for neighboring homeowners. Some experts believe that the value of homes close to legal cannabis-growing operations could suffer, and sellers may have to disclose to would-be buyers the presence of cannabis cultivation sites in their neighborhoods. The commercial production and the sale of recreational marijuana will be allowed in California starting Jan. 1, 2018, and the city of Sacramento is a prime market for the so-called “green rush” of businesses eager to profit from growing legal weed indoors. Real estate appraiser Ryan Lundquist states,
If it did end up being a problem with crime or a stigma associated with the cultivation of cannabis, that could be an issue. Or if it really smelled that could be something people don’t want to live next to.
As of July, over 100 businesses were seeking special permits from the city to run indoor marijuana growing operations. If the city were to approve all of the permits, there would be more legal marijuana growers in Sacramento than McDonald’s and Starbucks combined. About one-third of the proposed grow sites are in neighborhoods – including Curtis Park, North Sacramento, and South Land Park – and close enough to houses to potentially cause problems for homeowners and homebuyers. Regulations call for pot growers to implement odor-control and security measures, but whether the new rules will control the pungent smell of marijuana or prevent crime remains to be seen. Reporting on the effects of pot legalization on Colorado home prices, Realtor.com said, “homes within a half-mile of a marijuana business often have lower property value than homes in the same county that are farther out” and that “neighborhoods with grow houses are the least desirable, with an 8.4 percent price discount.” We will have to wait and see if home values will be affected by grow warehouses when the recreational sales of marijuana goes into effect next year.