Business Archives - Green Market Report

Kaitlin DomangueJuly 29, 2021
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Smoking cigarettes indoors has been shown to reduce a home’s resale value by up to 29%, says Realtor.com. When it comes to buying a cannabis enthusiast’s home, the resale value research is less clear, though 30% of realtors say they have struggled to sell a house where cannabis was grown. A recent study conducted by the National Association of Realtors said 50% of leasing professionals found it wasn’t hard to re-lease a property after tenants smoked cannabis indoors, and the organization “does not have a position on cannabis legalization.”

Legal cannabis raises home value

There’s been a lot of chatter surrounding cannabis and the real estate market. But, what kind of impact do cannabis operations have on property value by simply just existing in the same town or city as your house? According to research by real estate data company, Clever, property values rose by $17,113 more in states where recreational cannabis is legal, compared to states where it’s illegal or just legal at the medicinal level. Not to mention, millions of dollars in tax revenue created. In 2021, average home values increase by $470 for every $1 million increase in overall tax revenue from cannabis. 

Clever combined data from Zillow, the U.S. Census, and other resources to produce their report. 

New businesses, tourism, and jobs all contribute to the increase

When it comes to answering the “why”, that’s a little more complex. According to Clever, there’s a variety of reasons why property values are increasing as cannabis legalization takes place. “Numerous factors determine home values, including the home’s features and condition, the area’s amenities, and local crime rates. Legalizing marijuana can impact each of these criteria in ways that are both predictable and surprising — particularly by creating fresh demand for housing, new businesses, and tourism,” says the report. 

We often look to Colorado as a model representing cannabis’ potential in different states. Legalization brought Colorado a wave of new business, and the crime rate also dropped. Also, hotel revenue rose by $130 million in the first year after Colorado legalized, according to a study conducted by Penn State

Key Findings

  • Home values increased by $6,338 from 2017 to 2019 in states where cannabis is legal in some form, compared to states that haven’t legalized at all
  • On average, home values increase by $470 for every $1 million increase in tax revenue
    • Eight states reported a full year of tax revenue generated from cannabis sales in 2020, totaling $2.3. $1 billion of that being California sales alone. 
    • The seven states (plus D.C.) who haven’t yet sold a year’s worth of legal cannabis are predicted to collect $601 million in new annual tax revenue.
  • Home values are predicted to increase by an average of $61,343 in states that have legalized recreational cannabis, but sales aren’t yet taking place.  
    • California has seen the biggest increase in home values, up by $128,341 since 2017, among states that have legalized at the recreational level
  • Cities with more dispensaries are positively correlated with higher home values, suggesting legalization boosts jobs and economic growth.
    • In cities with recreational dispensaries, home values increased by $22,090, compared to states where recreational cannabis is legal but not yet being sold in retail locations
    • Property values increase by $519 with each new dispensary a city adds

According to Clever’s future predictions, home values will increase by more than $60,000 on average.

Looking at tax revenue

When it comes to tax revenue, where does it all go? Different states allocate their tax revenue towards different things, but according to a report by Urban Institute, education programs (including community colleges and pre-K schools) are the most likely to benefit. 

Oregon, for example, donates 40% of its tax revenue to the state’s school fund, accumulating $180,252,103 between 2017 and 2021. Arizona recently legalized cannabis for recreational consumption, and they plan to follow suit by donating 33% of their tax revenue to the state’s community colleges. 

Other states use their tax revenue for different things, like Washington, where the tax revenue goes towards a healthcare trust account to provide basic healthcare services to people without insurance. Ranked from most to least common, here’s how different states use their cannabis tax revenue: 

  • Education programs
  • Substance abuse education and treatment programs
  • Reparations for those negatively affected by the War on Drugs/criminal justice reform
  • General funds
  • Transfers to local governments
  • Administrative costs of initiating new laws
  • Public health and safety programs
  • Law enforcement, crime reduction, and fire departments
  • Transportation and infrastructure
  • Programs for conservation
  • Programs for veterans

Cannabis’ impact on local communities

This is just another piece of evidence supporting cannabis’ positive impact on local and state economies. According to Leafly, the legal cannabis industry supports 321,000 full-time jobs across the United States, adding 77,300 of those last year. Not to mention the tax revenue generated from legal cannabis sales. Criminal justice reform, education, substance abuse treatment, and local governments all benefit from the new source of revenue. 

As the cannabis industry continues to grow, we see it positively affects more than just consumers. 


StaffNovember 25, 2019
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Guest Post by Joseph Collins, Content Director at The Amsterdam

Ever since states began to legalize medical and recreational marijuana, the cannabis business is booming. Eleven states and the District of Columbia have passed laws making recreational marijuana use legal. Another 22 states have laws legalizing medical marijuana. The Farm Bill of 2018 legalized hemp for industrial purposes, including the production of CBD oil.

It is not too late to get in on the profits by starting your own cannabis business. If you’re thinking that too much startup capital is needed, then take a look at these cannabis entrepreneurs.

Success Stories

Gofire creators Peter Calfree and John Woodbine started Gofire with one goal: to create the perfect vaporizer. The vaporizer they created delivers a precise dosage of cannabis. They started their business with $200, used to bribe a local college student for access to a 3-D printer to make a prototype. They used that prototype to get the rest of their funding secured.

Fruit Slabs founders Roxanne Dennant and Brian Cona used just $1,000 to buy materials and equipment to make organic fruit leather edibles. They started out by selling to friends and family and now, their product is available in 65 stores across California.

Think Outside the Dispensary

When it comes to what kind of business to start, many people automatically think about starting a dispensary like TheAmsterdam or a grow operation. While this may seem like the most profitable idea, consider the fact that dispensaries and grow operations are the most strictly regulated. Also consider that as more states legalize cannabis, these types of businesses will begin seeing fewer and fewer profits. The crucial thing when it comes to starting a business in any industry is to come up with a unique idea that fulfills an unmet need. While funding a grow operation or dispensary is probably the most expensive option, there are options that do not touch the plant itself and thus, require less funding than the $1 million in cash needed to start a dispensary in some locations.

Ancillary marijuana businesses, however, tend to be less burdened with the red tape and high taxes associated with businesses that directly touch the cannabis. They also tend to cost less in startup capital, as mentioned above. For example, if you’re a foodie, you can create a unique line of edible treats. The startup cost is generally only the ingredients. If you are an artist, you could consider designing your own unique line of cannabis-themed t-shirts or accessories. Perhaps you know your way around a cannabis-legal city and can offer tourists a unique glance into the area.

Another area where you can get into the cannabis business with little funding is in the media sector. You can start your own blog and fill it with cannabis-related news, reviews of products, and recipes for edibles. YouTube also provides a way to get into the cannabis media business. You can start a channel reviewing different vaporizers, products, and even marijuana strains. Kick in some pay-per-click advertising, and you can start making money with very little startup funds needed.

Ways to Secure Funding

If your idea is the kind of groundbreaking concept that is beyond your financial means, you don’t have to fully fund the venture yourself. You can initially approach friends and family members to kick in on startup costs. Be sure that you have a rock-solid business plan in place and put how and when you’ll repay the loan in writing. You can also consider crowdfunding your venture. Platforms like Kickstarter have given many a cash-poor entrepreneur the necessary startup funds to get going. Other sites like Patreon can help get a media startup going. Of course, you need to be able to offer your supporters something in return.

Once you’ve gotten started and realize that it’s time to expand, you can begin looking for angel investors. They will put down their own capital as an investment and are often the first outsiders to invest. They also make great mentors. The trick is to attract one!

The cannabis industry is expected to be worth $20.2 billion by 2021. It presents many exciting opportunities for any entrepreneur. You don’t have to have a lot of startup capital. Just an amazing idea and the desire to succeed.

 

 


William SumnerMay 10, 2018
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Earlier this year, New Jersey Gov. Phil Murphy announced an expansion of the state’s list of qualifying conditions for medical cannabis to include chronic pain, migraines and Tourette’s syndrome. Murphy also implemented several other immediate reforms, such as lowering the patient registration fee, and called on the state legislature to pass a more comprehensive expansion measure.

As New Jersey prepares to expand its medical cannabis program and considers legalizing recreational sales, industry experts and investors alike are pondering what this change will mean for the Garden State. On May 9, 2018, an event called the Medical Cannabis Education & Business Summit was held to help answer some of those questions.

Organized by the New Jersey Cannabis Symposium, the event was the result of a collaborative effort between several organizations; including BSC Group, Longview Strategic, Ansell Grimm & Aaron, PC, & Marcum LLP. Green Market Report was a marketing partner for the event. The event covered a wide array of topics ranging from the differing opportunities between the adult use and medicinal market to how the medical cannabis landscape will change as New Jersey gets closer to approving a final expansion bill.

Serving as keynote speaker was was Mike James, an active NFL running back. Currently a free agent, James most recently played for the Detroit Lions until he was placed on injured reserve with a concussion. and is the first active NFL player to request a therapeutic use exemption for medical cannabis. At the event, James discussed his use of medical cannabis over opioid-based medications and his recent proceedings with the NFL.

Although his request was denied by the NFL, James continues to lobby medical cannabis reform.

The event also included discussion panels and lectures from prominent cannabis activists and thought leaders in the industry; such as Aunt Zelda’s co-founder, Mara Gordon. Speaking with Green Market Report, Gordon called the New Jersey cannabis market “particularly exciting” and praised the state’s activists, entrepreneurs, and patients alike.

“The professionalism of the people here was on display at last night’s event,” remarked Gordon. “They are clearly paying attention to the good, the bad, and the ugly regulations and business practices that are in place elsewhere, and are committed to doing it better for the people of this New Jersey.”

 


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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