Legal Marijuana Meant Higher Home Values. Will Mushrooms Work the Same Magic?

Denver really, really loves her drugs. In 2012, Denver passed a law to allow recreational marijuana (which became legal January 1st, 2014), and in May of 2019, we decriminalized mushrooms (of the psilocybin variety, but I’m going to continue to generically call them mushrooms in this post).

Decriminalization is not the same as legalization, so the $1 billion question remains (1): Will mushrooms follow a similar legalization path as marijuana? And if so, what are the implications legalized mushrooms would have on Denver real estate?

First off, marijuana is not legal everywhere in Colorado. It passed on the state level, but jurisdictions still have the final decision (which is why lame-o Colorado Springs still makes you pretend you have a medical issue). It is legal in 60 of our cities. (2)

The Impact of Marijuana on Home Values

Marijuana legalization has been very good to homeowners. Home values increased by 3 percent the first quarter after legalization. And in Colorado, the places that allow for legalized marijuana have grown 12 percent year over year versus the 9 percent year-over-year growth of cities that have yet to legalize marijuana.

On average, homes in cities that legalized gained an average of $23K in value over five years, and homes that were within 0.1 miles of a marijuana shop increased 8 percent more than homes further away. Plus, the marijuana industry added 44,000 jobs to our economy, which—love it or hate it—likely contributed in a big way to our population increase.

Will Psilocybin Mushrooms Have a Similar Impact?

But, you ask, are mushrooms legal in Denver? When will they become legal in Denver?

Here’s how it stands: Mushrooms have been decriminalized in Denver (and only Denver). What does the decriminalization of mushrooms mean? It means that authorities are highly discouraged from arresting anyone for possession of mushrooms in Denver. So, basically you can have them on your person without issue—if you can find them, because selling mushrooms is still illegal.

We don’t know if there will be a parallel between marijuana legalization and mushroom legalization. But if we want to look at history, it looks like this.

In the 1970s, many states had a wave of marijuana decriminalization. In 2000, medical marijuana was legalized in Colorado. In 2001, another wave of states decriminalized marijuana.

In November of 2012, Colorado and Washington made the selling of recreational marijuana legal—although this did not show up to the public until January of 2014. In the subsequent five years, nine other states have made recreational marijuana legal, and medical marijuana is currently legal in 33 states.

The satellite economy around mushrooms has already started in Denver. We are mostly seeing it in yoga, therapy, and PTSD treatment. But it stands to reason that this industry could also take off and increase housing costs—a very good or very bad thing, depending on what side of the coin you are on.

Sources

What do you think? Are mushrooms headed toward legalization? What will the impact be?

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.