Reefer Madness in Real Estate

Posted by Super Admin on Tuesday, November 13th, 2018 at 12:47pm.

Now that the smoke has cleared (pun within the first sentence! Punch me in the face please) with pot legalization, we are beginning to examine the legislation on a more macro, big-picture level. The effects will be sprawling, to say the least, but for the sake of real estate, it is impactful in two main ways. 

1. Houses in which marijuana is grown

It’s obvious but important to note that this isn’t a new concept as a result of legalization, REALTORS® have been dealing with this issue for decades. Still, there are new factors to consider. First of all, if you decide to grow plants - that’s great, but please remember that FOUR PLANTS is the maximum, don’t go all George Jung. Also as REALTORS®, we would like to offer some advice as it pertains to selling your property with weed in mind:

  • The presence of marijuana plants in a house will make it less marketable, Yes the law has changed but there are still plenty of people who buy into the stigma, no matter how outdated it is. We certainly don’t agree with that stance, but selling is all about casting the biggest net you can for buyers. Look, ideally, you could grow plants and sell to some hip young couple that sees it as a cool hobby, but that isn’t realistic, especially in this market. Put those plants away, we want to have those hip couples go through your house, just like we want buyers who think marijuana is the devil’s lettuce. Perception takes much longer to shift than federal laws.
  • If pot plants are visible, moisture testing with a home inspection might be an intelligent idea. Honestly, moisture readings are almost always a good idea anyway, but it makes even more sense if you do see plants.
  • This might seem obvious but just because it’s legal, doesn’t mean the smell changed. Stigma aside, which will still play a factor fair or not, even the most progressive buyer probably wouldn’t enjoy the stench of weed caked into a property. Treat it like cigarettes and go outside. Not in your garage, go outside. 
  • It would be wise to look into insurance policies for your home. Many policies have a specific exclusion clause as it relates to grow-ops and/or simply growing cannabis. This is a huge issue and absolutely warrants some legwork.

2. Condominiums

At the risk of sounding redundant, just because it’s legal doesn’t mean anything has changed in the condo sector either. In fact, it may be more difficult to get away with smoking it inside as many condo boards have or will be moving forward with amendments to their by-law profiting the smoking and/or growing of weed within the units and common areas. And these will be enforced much more heavily prior to legalization, so again, absolutely not a license to smoke to your heart’s content within your unit for example. If you’re renting, it’s the same deal. The landlords that will allow this will be the exception, not the rule, so it’s safe to assume that any rental property you have will have current or forthcoming rules forbidding it. 

If you sense any running theme here, it’s if you enjoy the reefer madness, the laws certainly don’t let you off the hook as it pertains to marketability, resale value, etc. Unfortunately, there will be a stigma for quite some time, and even beyond that, the smell will always exist as a strong negative, stigma or not. It’s also more important than ever to be smart about home insurance if you do plan on growing and make sure to be aware of condo bylaws before you light up. 

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