Image result for marijuana laws and real estate Cannabis has been legal in Canada for just over three months now. Even before Bill C-45, The Cannabis Act became law, many homeowners and real estate agents expressed concerns about the impact it would have on their home value. In fact, in a recent survey by Zoocasa, most Canadians polled felt that growing and using marijuana in a home will lower the value of the property. While each province and territory have developed their own policies regarding growing and using pot in public and private places, many questions and concerns still remain in about the impacts of cannabis in the real estate industry. To date, people are now legally allowed to use marijuana in their own homes. Restrictions about public usage varies from province and territory. While most regions have set restrictive guidelines on where people can smoke pot in public, Manitoba and Saskatchewan are currently the only two provinces that do not allow consumption of cannabis in any public area. Landlords and rental companies are also setting strict guidelines with many banning any use or plant cultivation in their rental units completely. Since Bill C-45 became law, the majority of home buyers, sellers, realty agents, landlords believe that marijuana will have a negative impact on the housing market. The main issues questioned included:

Pot Usage



While it is too soon to tell how cannabis usage will affect your property value, early surveys have shown that the majority of Canadians believe using pot in the comfort of your own home will adversely affect the home’s value. Of the Canadians asked, 64% felt smoking marijuana in your home would lower the total value while only 21% felt that home usage would not affect the realty valuation. The remaining people polled were neutral. The numbers differed slightly among those renting property. Forty-six percent of renters felt that marijuana use in the home would decrease its value while 33% felt that pot usage would not affect the rental property valuation in Canada.

Growing Marijuana Plants

Under the new law, Canadians can grow up to four plants in their home in most provinces and territories. When Canadians were asked whether or not they felt growing cannabis plants would affect the resale value of their property, the results depended greatly on the age of the person surveyed. Millennials were more lenient with their views. Only 38% felt growing plants inside the property would reduce its value. Baby boomers and Gen-X populations had far different views. Fifty-eight percent of the Generation X population and 59% of the boomers felt that home plant growth would lower their property value. Over half of the people surveyed (52%) would not consider buying a home if they knew pot plants had been cultivated in the property. Many potential home buyers are considered about the short and long term issues they will face buying a home that has been used to produce cannabis. Buying a home that has been used as a grow op can be costly to repair.

Insurance Coverage

Since Marijuana became legal in Canada, many insurance companies have added exclusion clauses in their policies to protect themselves from the cost of covering damage caused by using and growing marijuana. The smoke and odour from pot use can linger in homes and furnishings and cause health problems for new owners. Cleaning the interior of the place to eliminate the residue is pricey and not covered by house insurance. Growing plants in homes is also very risky. People who cultivate cannabis in their home are 24% more likely to have a house fire. There is also a greater chance the property will have electrical damage, moisture build-up, and mould issues. Growers are also at a higher risk of being burglarized. Most insurance companies are refusing to cover the costs of these damages if they are caused by pot usage. Before you buy or selling a home or condo, it is important to check with your insurance company and real estate agent first before you finalize the deal to make sure you are covered if damages occur to your home.

Cannabis Stores and Home Values

While it varies from territory to territory, all provinces are allowing pot shops to open in their cities. Despite the provincial and federal governments acceptance of marijuana stores, most Canadians surveyed expressed concerns about having a dispensary in their neighbourhood. Most felt that opening a pot shop in their community would lower their property values. Of the 1300 plus people surveyed, 42% felt that having a cannabis shop in their area would negatively impact their property’s value while 48% said having a dispensary in a neighbourhood would discourage them from purchasing a home. Now that Cannabis is legal in Canada, many political parties, industry leaders, and private sector consumers are left to deal with the impact that this new law will have on their personal and professional development. The real estate market is just one area seeing the adversity from this new law. Although Bill C-45 is still a relatively new law, many Canadians believe that the production, cultivation, and commercial sale of Marijuana will have a negative impacts on buying, selling, and renting residential properties. Home owners and real estate agents have many questions and concerns about the short and long term affects that cannabis legalization will have on the housing market. If you are considering buying or selling your home, it is important to talk to your real estate agent first about the Cannabis Act and how it will affect your property value.