Before cannabis legalization, there was a fear that there would be negative effects on the Canadian housing market. According to recent figures, it looks like the opposite is actually happening.
RE/MAX recently released survey results and a small study on some smaller markets in Canada, and it appears that cannabis legalization is generating “micro-booms.” In Smiths Falls, Ontario, the largest cannabis producer in the world, Canopy Growth, opened up an Ottawa-area facility that employs 1,300 people.
"The impact of Canopy Growth on Smiths Falls cannot be understated, and it's growing," says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. "The economy in the Rideau-St. Lawrence area is experiencing a boom, which is triggering home sales, which rose by 27.1 per cent year-over-year, and average prices increased 10.5 per cent. Demand is up and there's a housing shortage in the region. We expect to see similar cannabis industry-related growth in other regions as well."
In Windsor-Essex, Aphria opened in Leamington, Ontario, employing 1,000 people. In September 2019, home sales increased 7.82% and the average price went up 9.1%. Is it a coincidence that housing activity picked up when legal cannabis gave the economy a boost? We don’t think so.
When it comes to cannabis retail locations, they haven’t had much of an impact. In Calgary, there are more than 50 cannabis storefronts, Vancouver has more than 20, and Toronto only has six. Despite a RE/MAX survey that found that 65% of Canadians don’t want to live near a cannabis store, there hasn’t been a dip in home sales in these areas due to proximity to the storefronts.
"It appears that there were a lot of anticipated reservations surrounding cannabis retail and the negative impacts on local property values that did not come to pass. We have not seen a decrease in home sales or prices that can be attributed to legal cannabis," says Alexander. "In fact, the opposite may be true. As the retail footprint grows and diversifies into edibles and other formats, buyers and sellers may start to feel less resigned."
More than one-fifth of Canadians already live near a cannabis retail location, and 72% say that it is not a factor in their decision to move. Close to one-third of Canadians say that a cannabis retail location in the neighbourhood would deter a home purchase, and 25% would move if one opened up. That may sound like a lot of people impacted by cannabis retail, but 44% actually want to live near one.
"Even with changed attitudes, however, the idea of NIMBYism still looms in the background," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "But for the time being, acceptance and adoption seems to have been pretty positive. The market is expected to expand even further with the legalization of topicals and edibles in December of this year, which could pave the avenue for even greater growth of the industries associated with legal cannabis. There's clearly an appetite for it."
For more proof of Canadians relaxing their views on legal cannabis, check out the findings from Zoocasa.