How will Canada’s New Cannabis Laws Affect Real Estate?

homzvilla

Canada’s new Cannabis laws went into effect on October 17th this year and this has opened up real concerns for homeowners, landlords and tenants.

Federally, Cannabis is being treated the same way alcohol and cigarette smoking have been governed. However, each province is required to figure out how to sell and regulate marijuana.

What it means in Ontario:

  • Ontario is only regulating the production and smoking of cannabis cigarettes at the moment. The production and usage of edible cannabis is not yet permitted.
  • Cannabis consumption is being handled by expanded rules regarding the consumption of alcohol under the Liquor License Act of Ontario.
  • Smoking marijuana is being handled by expanded rules of the existing regulations under the Smoke Free Ontario Act.

The basics:

  • Federal regulations allow for legal access to cannabis and control it’s production, distribution and sale. People of legal age will be allowed to publicly possess up to 30 grams of dried cannabis, or it’s equivalent in non-dried form.
  • Provincial regulations will regulate where it is sold and increase the age limit to 19:
    • The province has not yet decided whether to permit outdoor growing of plants in the garden.
    • You can smoke a cigarette in your car if the is no one under 16 in the car with you. You cannot smoke a cannabis cigarette in your car at any time.
    • Today, someone drinking alcohol in the hallway of an apartment building or smoking a cigarette in a restaurant can receive a Provincial Offence Notice by an enforcement officer. Consuming cannabis will be treated the same way.
    • Medical cannabis will be treated differently. For example, condominium boards may put conditions on smoking medical marijuana inside a unit, by requiring proof that for example, edible marijuana plants cannot resolve a person’s illness and if smoking must take place, the unit owner will be required to pay to provide proper ventilation so that it does not bother any other unit.
    • Police will be able to close a residence and remove people if they find more than the permitted number of 4 plants being grown.
  • Condominiums have three options to deal with these changes:
    • Amend the Declaration to prohibit it (80% of owners need to approve)
    • Change the rules to prohibit it (the majority at any meeting need to approve)
    • Do nothing (use existing condominium laws of unit owners not causing a nuisance or danger to other unit owners to prohibit this)

Practical Issues to Consider:

  • Regarding insurance: cultivating cannabis plants will likely increase risk of damage to your property; therefore, it should be disclosed to your insurer. Failure to do so may cause the insurer to deny coverage later on if something happens – even if unrelated to the cultivation.
  • Regarding mortgages: lenders have not yet taken an official position on how the existence of legal plants in the home could affect mortgage approval.
  • Can one safely grow cannabis plants in home or apartment? – A professional electrician will likely need to install an air ventilation system that blows the air outside and not within the walls. Another idea is a ‘grow tent’ to minimize damage to the property.

Many details are still being worked out, but if you are planning to grow or smoke cannabis, there are considerations and when renting you need to make sure your tenants know the rules and the consequences.

2 thoughts on “How will Canada’s New Cannabis Laws Affect Real Estate?”

  • marie
    on November 16, 2018

    This was not something that had occurd to me. Interesting article, thanks Lea

    • Lea Barclay
      on November 18, 2018

      Thanks Marie!

Leave a Reply

Your email address will not be published