On Wednesday, October 17, Canada will legalize marijuana—becoming the second country in the world to do so. This has a host of implications for countless industries. For Canadian homeowners, it means they will be able to grow up to 4 plants per residence for personal use.
But that could have its pitfalls.
That’s because lenders currently HATE if a property has been used for growth of cannabis. If there is a property that has been a “grow-op” for even ONE plant, it may become blacklisted and the property becomes very difficult to mortgage. Lenders are also required to tell CMHC and the insurance companies.
However, with the impending legalization, I think there are going to be some homeowners (and renters) who will take advantage of the legality of growing their own pot.
So far, all lenders and insurers have come out to say that they are still against grow-ops and they have not, and are not looking to, change their policies.
So, what does this mean?
- It’s best to not grow any cannabis yet. We’re far too early in the game to know what the effects of future financing will be and I would wait for several months before lenders change their policies.
- Landlords should be extra vigilant and remind their tenants not to grow cannabis!
The law (Bill 30) states that any lease entered into before October 17, 2018 ALREADY prohibits growth of cannabis in a home. If someone enters into a lease AFTER October 17, 2018, the lease has to specifically state that the tenant cannot grow cannabis.
If you have any questions regarding the above article or would like to speak to one of Vancouver’s top mortgage brokers, please don’t hesitate to contact me.