Recreational marijuana has been legalized in New York State. Surprisingly, this may have a massive effect on the state of the real estate market in New York City. How will marijuana legalization impact NYC real estate?
Here’s everything you need to know.
Increase in Demand for Commercial Properties
There could be a massive impact of cannabis legalization on NYC real estate. A report from the National Association of Realtors (NAR) studied the states where medical and recreational marijuana had been legal for more than 3 years. It found that the states saw greater increases in demand for commercial properties than those where cannabis was illegal.
In a market like New York City which is one of the wealthiest cities in the world, this spells good luck. The need for stores and warehouses for storing and selling and producing cannabis will rise.
Greater Demand for Warehouse and Retail Storefronts
In the same study cited above, there was a 19% rise in demand for warehouses. There was also an 18% increase in demand for retail storefronts and a 15% rise in demand for vacant land. This was just in states where marijuana was legal for medical use. In areas where recreational marijuana was legal, 42% of NAR members saw an increase in demand for warehouse space. For storefronts, this was 19%, and for vacant land, it was 21%.
The literature on the subject shows that where there is demand, marijuana legalization will result in an uptick for real estate. A 2018 report said marijuana is consumed in New York City more than anywhere else. If we are to go by that, then this means a huge boom for the real estate market in New York City.