Pot shops and home prices

The legalization of pot is expected to impact the economy, the housing market and local businesses who are already selling the drug. But for homeowners, do you have concerns with the new shops popping up in your neighbourhood? One real estate agent believes a stigma around marijuana still exists.

Paul Greenberg, a Toronto real estate agent is predicting a shock effect once marijuana is legalized. “For the immediate, I think that people don’t want them in the area so it could affect house prices.”

A recent study out of the University of Wisconsin looked at the impacts pot shops were having on real estate in the city of Denver and it was positive. Homeowners saw an increase of about 8% in property value if they were near a cannabis store, that’s approximately $27 000 more than homes a kilometre away.

But in terms of a “Starbucks effect”, where a coffee shop or LCBO store opening can increase property value, it may not be the same deal for pot.

“People like the convenience of having an LCBO but that’s been legal forever so I don’t think people are going to be used to marijuana being legal for some time.”

While the legalization could boost the market the move is expected to shut down all existing dispensaries, closing dozens in the city of Hamilton alone. Tamara Hirsh, the spokesperson for Pacifico, thinks the illegal shops will keep coming despite the Premier call to shut them down.

If the law passes and the government has the exclusive rights to sell recreational pot near you, other companies caught selling it could be fined up to $1 million. While we still don’t know where the new pot shops are going to be placed in Ontario, Hirsh says she wouldn’t be surprised if the government took over the locations of existing dispensaries throughout the province.