A recent study published in the Journal of Agricultural and Applied Economics reveals that property values in Oklahoma have increased notably since the legalization of medical cannabis in 2018. The research indicates that counties with a higher concentration of cannabis growers experienced a surge in housing prices due to a real estate buying frenzy fueled by cannabis cultivators.
Researchers, including Brian Whitacre from Oklahoma State University, initially did not anticipate the impact of cannabis legalization on housing markets. However, during a community meeting in Okemah, residents reported that cannabis growers were purchasing properties at inflated prices, often making cash offers for homes that were not even on the market. Whitacre noted, “We heard stories of cash offers for places when they weren’t even for sale.”
The cannabis boom led to the establishment of hundreds of dispensaries and generated millions in tax revenue. By 2021, cannabis farms in Oklahoma outnumbered traditional wheat and cotton farms. As of 2024, Oklahoma holds the highest number of cannabis dispensaries per capita in the United States.
The study began with a focus group in September 2023, where 25 participants discussed their concerns regarding cannabis legalization, which included health and safety issues. However, many participants expressed support for the industry, recognizing its economic benefits.
The analysis of county-level property data showed that counties with the most cannabis grows per capita saw housing values rise by 20% to 25% over five years, surpassing similar counties in Kansas and Texas, where cannabis remains illegal. Notably, the increase in property values began around 20 months after the legalization of medical cannabis, coinciding with a wave of new growers entering the market.
The findings confirmed local residents’ fears of being priced out of the housing market. For instance, home values in Okfuskee County increased from $72,500 at the time of legalization to $120,158 by June 2023, according to Zillow’s inflation-adjusted home value index.
Okemah Mayor Ron Gott acknowledged that the demand for land from cannabis growers led to inflated property prices, with reports of buyers—some from foreign markets—paying excessively for land. “We’ve seen an increase due to the fact that some of the Chinese came in with just wads of money and paid big amounts for land that wasn’t really worth what they paid for,” he stated.
Gott highlighted that this escalation in housing costs has made it difficult for local residents to purchase property, stating that properties that should sell for around $3,000 per acre have been fetching closer to $10,000 per acre.
Carl Alls, a local real estate agent, noted that while property prices were already on the rise due to factors like increasing lumber costs, the competition from cannabis growers further accelerated the trend. He remarked, “The prices were going up anyhow, because in our area we’ve had relatively really cheap land here for a long time.”
Despite the initial boom, some smaller cannabis cultivators in Okfuskee County are now facing challenges, with a decline in the number of active grows as the state enforces stricter regulations on illegal operations. The dynamics of the local real estate market continue to evolve as the cannabis industry adapts to these changes.
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