Legal Marijuana & Impact on Nanaimo Real Estate
As the legalization of marijuana continues to move forward in Canada, it is important to consider the implications for real estate in Nanaimo and throughout Canada. How will property values be impacted by “pot shops” in a neighbourhood? Will landlords be able to prohibit the use of marijuana in their properties? What other changes will potentially impact homeowners and tenants?
According to a U.S. study that included professors from Wisconsin, Georgia and California, home prices in Colorado actually increased by 8 percent in 2014 – the same year the state legalized marijuana. John Andrew, a real estate professor at Queen’s University, feels that legal cannabis stores may drive more traffic to nearby retailers and boost interest in the surrounding neighbourhoods. However, it is not prudent to align the rising home prices in Colorado simply because of the legalization of cannabis, given that most real estate markets in North America have seen similar housing prices increase.
Another concern is the potential for landlords not to be able to control the use of marijuana in their rental complexes. Many strata management companies are of the opinion that much like cigarette smoking, landlords will have the option to market their rental units as being “no smoking” properties that would include pipe tobacco, cigarettes and marijuana. Some condo buildings that have already adopted a 100 percent no-smoking ban inside and outside on the complex common property will continue to enforce this bylaw even when marijuana is legalized. Interestingly, one Alberta landlord intends on investing in rental properties that will cater to cannabis smokers. “There’s a lot of great tenants who just might like to smoke in their unit,” said William Blake, a member of the Alberta Landlord Association. “And if it’s legal, why not? They don’t want to be bothered by landlords, they don’t want to be bothered by other tenants. They would be attracted to these types of units.”
Recently, our MMS Homes team has seen a marked increase in the sale of large warehouses and farms throughout Vancouver Island that are intended for large-scale legal grow ops. What is noticeable is the scientists, researchers and large corporations that have become involved in these sales, as very well-educated and savvy business owners. With increased real estate demand for these types of properties, it will be interesting to see if there is a benefit to being “first to market” as so many corporations benefited from in Colorado in 2014.
There are still many unanswered questions. Currently, owners are required to fill out a Property Disclosure Statement and acknowledge if a property has had a grow op in it, and many banks refuse to provide mortgages for these types of properties. One question will be whether or not a homeowner who has the permitted number of plants in their home will be required to declare this when selling, and if there would be any change in policy if plants were grown in a rental property for personal use without the owner’s consent.
At the end of the day, I believe that tenants or owners in a cannabis business must be held to a higher standard than other tenants, and ensure that their rights as a business do not negatively impact those of their neighbours. Insurance companies will need to provide more information on how a policy can be provided for a commercial grow op, or even for a recreational grower who owns his own home. There are many questions still left to be answered, but it is important to consider these types of issues long before they become law.
What are your thoughts on this? We’d (weed) love to hear from you.
Brian & Myles McCullough