Starting October 17th, 2018, it will be legal for most Canadians to buy, possess, and grow marijuana. Previously, cannabis was only available to individuals who required it for medical or research purposes.Each Canadian province will have to set its own rules for cannabis, including minimum usage age, where it can be purchased and used, and how much a person can possess. Provinces will also have to set guidelines for those who want to grow the up-to-four plants allowed by the Cannabis Act.
From legalization, the Canadian government is expecting recreational marijuana sales to hit $4 billion annually. This $4 billion is subject to a 10% excise tax for the federal government, and each province will be able to set its own additional tax. Thus, provinces can expect marijuana to be a huge boost to their revenues.
Both the ability for Canadians to grow marijuana at home and the expected expanded use of the recreational drug has many in the real estate sector concerned. The Canadian Real Estate Association (CREA) has been up in arms about the implication of cannabis legalization, citing that it can cause damage to and devalue homes. It’s without a doubt that with this new member of Canadian society, homeowners, landlords, and renters will be severely affected.
The effects of cannabis legalization on homeowners
In a CREAearlier this year, they firmly stated that there were major issues with cannabis legalization, and that more regulations were needed on growing cannabis at home. CREA wanted Bill C-45, which legalizes cannabis, to provide a framework for safe home cultivation, believing that without a framework, cultivation could lead to electrical fires, increased theft, and potential fungus and mould issues in homes across the country.
The dangers of growing marijuana in your home is due to the need for lights, which can cause excess energy consumption and potential fires, the need for a certain humidity level, which can encourage mould or fungus growth, and the increased potential for break-ins due to the value of the plants. However,believe this is false speculation. And that with four plants, humidity levels won’t be high enough to encourage mould or fungus. Additionally, four plants will only require 200 watts of lighting—a level that’s safe against electrical fires.
- Homes around dispensaries were subject to a discount prior to marijuana being legal. Legalization resulted in a lift in the stigma around the drug, resulting in home prices returning to its fair value.
- The large volumes of business for these dispensaries resulted in an economic boost to the local area.
Implications on landlords and renters
- Quebec: Landlords can change signed leases and ban tenants from smoking. They have 90 days after legalization to make said changes—this does not apply to medical marijuana.
- : Landlords can amend existing leases to add in rules about cannabis use and cultivation, but they have to provide a four-month notice before April 30, 2019.
- : Landlords can prohibit possession, cultivation, use, and the sale of marijuana in a rental unit.
- : Renters and condo tenants may have restrictions on growing marijuana at home due to rental contracts or the condominium bylaws.
- : Prohibition of smoking cannabis where existing lease prohibits tobacco and prohibition of growing the drug unless it’s for medical reasons.
- Ontario: Condominium boards can restrict growing cannabis, and smoking depends on individual building rules and lease agreements.