Marijuana and Real Estate: A Budding Issue

The legalization of marijuana continues to impact the real estate industry. If marijuana is legal within a state, the product is grown, harvested, stored, sold, and consumed within state lines. As such, commercial practitioners are finding increased demand for warehouses, land, and storefronts for marijuana. Residential practitioners are navigating an environment of marijuana being used and/or grown within rental properties, homeowner associations creating rules about consumption and growth, and title questions when selling a home where the product has been grown and consumed. This report dives into these themes using a survey among members of the National Association of REALTORS®.

The report is broken down by how long marijuana has been legal within the state. The legality was based on laws that were in place at the time the survey was deployed in March of 2025.

U.S. Map: Legality status of marijuana by state

In 2025, the majority of the United States now has some form of legalized marijuana, and it is essential for real estate professionals to understand the impacts that legalization has on the industry, and any opportunities this may present. In this report, we measure the effects of marijuana legality on various sectors of the real estate industry, as well as any shifts from the last time the study was conducted in 2023.

Residential Real Estate

10% of respondents in states where recreational marijuana is legal believed inventory was tight for multiple reasons, including as a result of this industry.
Respondents primarily report no noticeable change in residential property values near dispensaries.
The longer that recreational marijuana is legalized in a state, the more likely that homeowner associations have added restrictions to smoking (43%) or growing (33%) in common areas.

Bar graph: Homeowner association rules and regulations about marijuana

Selling a Grow House

20% of residential members in states that legalized recreational marijuana more than five years ago had sold a grow house in the past.
The majority of members (60% to 82%) who have sold a grow house in the past indicated that it was not hard to sell.
Members in states with more recently legalized recreational marijuana had the least difficulty selling a grow house (18% reported having difficulty).

Bar graph: Experience selling marijuana grow houses

Residential Property Management

The longer that recreational marijuana has been legalized, the more likely that addendums are added to leases to prevent growing in properties (38% in states legalized more than five years ago, up from 27% in 2023).
In states where recreational marijuana is legal, 60% to 67% of residential property managers have seen addendums added to leases that restrict smoking in properties (56% to 65% in 2023).
Nearly two-fifths of members in states with any legalized marijuana had no issues leasing a property after the use of marijuana in a property (40% to 50% in 2023).
When there were issues leasing after smoking, the most common issue was the smell, which 39% to 47% of these members had encountered.
Approximately one-fifth of landlords were unwilling to take cash at all for rent, and about one-tenth will not take cash from an illegal federal activity for rent. However, nearly half of landlords in states with any form of legalized marijuana do take cash for rent.

Bar graph: Addendum/provisions in leases: Restrictions on growing marijuana

Commercial Real Estate

In states with legalized recreational marijuana, nearly half reported an increase in demand for commercial spaces, with this increasing over time. In these states, approximately one-fifth report increased demand for warehouses.
7% to 12% of members had seen an increase and 10% to 20% had seen a decrease in commercial property values near dispensaries.
16% of commercial members in states that legalized recreational marijuana in the past five years reported an increase in property purchasing over leasing in the past year (18% in 2023), compared to 10% in states that legalized more than five years ago (14% in 2023), and 8% of those in states where only medical marijuana is legal (4% in 2023).
Among commercial members who have seen an increase in property purchasing over leasing in the past year, the majority have seen the increases with warehouses, followed by storefronts, and land.

Bar graph: Commercial property values near marijuana dispensaries

Perception of Crime

In states where both prescription and recreational marijuana were legalized, 21% to 28% of commercial members reported a perception of an increase in crime near dispensaries, while 39% to 46% reported no change in perception of crime.
Actual increases in crime near dispensaries were less frequent than perceived increases in crime. Nearly half of commercial members with any level of legal marijuana cited no actual change in crime.

Commercial Leasing

7% to 12% of commercial members in states with some form of legalized marijuana were leasing to marijuana related businesses.
Commercial member respondents currently leasing to marijuana businesses are primarily leasing storefront (72% to 83%) and warehouse (50% to 78%) properties.
More than two-thirds of commercial landlords who are leasing to marijuana businesses are Mom & Pop landlords that are smaller in size (less than 10 properties).
Approximately half or more of commercial member respondents reported that no additional addendums were added to leases regarding the sale of marijuana. However, 35% in states where recreational marijuana was legal the longest did have lease addendums regarding sales of marijuana (23% in 2023).
The most frequently cited concern was the smell when leasing to marijuana related businesses, followed by fire hazards, and theft of cash on property.
In states where recreational marijuana has been legal the longest, 38% say landlords are willing to take cash for rent (45% in 2023).