Getting High and Low Prices: Marijuana Dispensaries and Home Values

Abstract

Laws concerning marijuana have recently undergone liberalization in many North American markets. The changing legal environment has enabled the establishment of retail marijuana dispensaries. Local externalities generated by dispensaries may impact home values, particularly by influencing demand for the surrounding neighbourhood. Recent empirical evidence has found a positive effect of dispensaries on home values. I use unique data on 84 dispensaries and 62,000 repeat home transactions from Vancouver, Canada to estimate the effect of dispensaries on home prices. Historical Google Street View images are used to construct a longitudinal record of dispensary activity. I find no evidence that dispensaries increase local home values in Vancouver and some evidence of a negative price effect for homes located within 100 meters of a dispensary. JEL: R21, R30, R31, R38 Housing, Marijuana, Local Amenity, Real Estate