When Marijuana Grow Operations are Down the Street

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Sacramento's appraisal expert, Ryan Lundquist, provides more insight on marijuana growth and home appraisals.

Does it matter for value if there are a few legal marijuana grow operations in the neighborhood? That’s not really a question we asked much in the past, but it’s definitely a reality in many portions of California now since recreational marijuana was approved at the ballots last year. I know this is a polarizing topic, but legal cannabis cultivation is something we have to pay attention to now in real estate – regardless of our personal views. Today let’s look at a specific situation I encountered a few weeks ago and consider a few takeaways.

Not an advocate: Just to clarify, I am writing for the sake of analyzing real estate trends. I am not a cannabis advocate in any way and this post is not about whether marijuana is good or not for society.

 If you didn’t see in the SacBee, there are now 108 locations within the City of Sacramento with a commercial cannabis permit on file. This means there are at least 108 planned legal grow operations. The largest cluster is in an industrial section off Power Inn Road, but there are quite a few in North Sacramento too

The situation: I appraised a house on Eldridge Avenue in Sacramento a few weeks back and I discovered there are three commercial cannabis cultivation permits on file with the city one street to the south. This is a residential area, but it’s next to industrial properties.

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