Cannabis & Rental Properties, What Landlords & Property Owners Should Know

Cannabis & Rental Properties, What Landlords & Property Owners Should Know

Cannabis & Rental Properties, What Landlords & Property Owners Should Know

The movement to legalize medical and recreational marijuana is gaining momentum across United States, Canada and worldwide (notwithstanding recent moves by the U.S. DOJ to rescind non-interference). Currently nine states and Washington, D.C., have approved recreational use of marijuana, 21 states plus Washington, D.C., and the U.S. Virgin Islands have decriminalized use, and 29 states and Washington, D.C., allow medical marijuana use.

Yet whether you call it pot, weed, 420, mmj, cannabis or marijuana, it’s still illegal at the federal level in US. So, what does this mean for real estate industry specifically residential property owners and landlords?

Knowing State Laws

Cannabis laws for each state differ, so you need to research the specifics of your state’s real estate laws. So far, the following states have approved the sale and use of marijuana for recreational purposes:

  • Alaska
  • California
  • Colorado
  • Maine
  • Massachusetts
  • Nevada
  • Oregon
  • Vermont
  • Washington
  • Washington, D.C.

And the following states have decriminalized its use:

  • Alaska
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Illinois
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Mississippi
  • Missouri
  • Nebraska
  • Nevada
  • New Hampshire
  • New York
  • North Carolina
  • Ohio
  • Oregon
  • Rhode Island
  • U.S. Virgin Islands
  • Vermont
  • Washington, D.C.

In addition, the following states have legalized medical marijuana for patients who qualify:

  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Florida
  • Hawaii
  • Illinois
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Montana
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Dakota
  • Ohio
  • Oregon
  • Pennsylvania
  • Rhode Island
  • Vermont
  • Washington
  • Washington, D.C.
  • West Virginia

Generally speaking regarding recreational use, if you’re over 21, it’s okay to keep an amount sufficient for personal use and use it at your own residence. “Use” is often defined as smoking or vaping, but it also includes consuming edibles and tinctures or using topical products.

Decide where you stand

Just as you can prohibit cigar or cigarette smoking in your rental, you can also prohibit pot smoking, or even its use, on your property. In fact, because marijuana is not legal federally, you might be able to rely on clauses prohibiting behavior unlawful under state and federal law or an anti-drug policy in your lease.

When deciding whether to allow pot use on your property, consider its medical use and the impact of your decision should you have tenants who are using for medical reasons. Also consider the growing marketability of open marijuana use in your state. Many businesses have benefited from their alignment with the pot industry and its customers, who may be curious tourists or connoisseurs of the lifestyle.

That said, smoke or other perceived negative aspects of marijuana use could certainly impact neighbors or other tenants. If you do choose to prohibit marijuana use on some level, do so with the complete understanding of the laws in your state, as well as your desired tenants, and include the appropriate clause in your lease.

Know before you grow

Growing is where there are some very specific differences from state to state. Some states allow growing a certain number of pot plants at home, with some even specifying how many can be flowering at the same time. In others, it differs for recreational and medical use, and still others allow only qualified medical marijuana users to grow their own.

With these nuances, one thing is constant: The allowed amounts are enough for personal use only. Growing for resale and distribution requires a specific allowance from the state government.

As a landlord or property owner, you can decide if you want to allow tenants to grow pot on your rental property. Things to consider include electricity use from indoor growing lights or whether plants growing outdoors could encourage trespassers onto your property. You can prohibit growing altogether by including a clause in the lease saying so.

Put it in the lease

Should cannabis-related issues arise after the lease has been signed — and if there was no clause prohibiting it — you’ll need to rely on an anti-drug or crime policy that hopefully was included in the lease? A breach of the lease could be cause for eviction if the tenant doesn’t comply after getting a written notice. If you did not include such a clause, it will be difficult to enforce your wishes during the term of the lease.

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