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October 10, 2019 | Don’t Inhale

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Was it just months ago this blog was labeled not only pathetic but paleo? The crime: suggesting legal weed might impact real estate. Especially rentals. And the question was posed: would you want to be a landlord renting space to junior potheads growing plants in the shower and exhaling odours into the paint?

The moisters said this was insane, and wondered if my Eight Track or Commodore 64 had gone on the fritz to make me so irritated.

Well, guess what?

Landlords are, in fact, fussed about cannabis. Zoocasa’s latest survey of property owners shows a huge discrimination growing against users. Eighty-five per cent of landlords say they’d prefer to rent to tenants who do not grow, roll, puff or vape. And check this out…

“Landlords have also become increasingly worried about cannabis-related damage to their properties, with 57 per cent citing this as a bigger concern for them since cannabis was legalized. And more than half (55 per cent) said they would consider charging higher rent in future to cover potential cannabis-related damage.”

More rent charged to cannabis users. That should be interesting when it gets to the landlord-tenant tribunal. The survey found a majority of renters understand their rights – which, under the law, is to grow up to four plants for personal use, and to puff their brains out if they wish in the sanctity of their own leased space.

So the likely outcome? Way more non-smoking units, which means no indoor weed, tobacco or vape pens. Now, this raises a few questions…

Like, can a lease have a no-smoking clause baked into it?

Answer: you betcha. It’s perfectly legal for landlords to refuse an applicant-renter who smokes – anything. LLs can add clauses additional to the standard and legalized ones, a practice which has been approved by bodies like the Landlord & Tenant Board of Ontario.

Could weeding out smokers trigger any discrimination penalty?

Answer. Nope. Suck it up. You are not removing the right to smoke, just the freedom to do so inside the property you (as a LL) own. The tenant can go and stand in the rain in an alley and puff all she wants. Smoking is not considered an addiction, medical need or disability by any legislation.

What happens if a rebel tenant smokes/vapes at home anyway?

Smoking, sadly, is not considered a material breach of a lease – even one that prevents smoking. Weird, but true. This does not mean a tenant can defy the LL, however. The building owner needs to document instances of observed smoking or log the complaints of other tenants bitching about second-hand smoke. A LL can then issue warnings followed by a Notice of Lease Termination based on potential damage to the property, or the fact they have interfered with the reasonable enjoyment of other renters (or you, if you live there). Then, out ya go, Mr. Reefer Madness.

And what happens when a tenant becomes a cannabis rancher in the laundry room?

Answer: lots. A LL can enter and inspect a property if there is any suspected damage occurring, or pretty much at any time with adequate notice (it’s in the lease). Growing weed plants takes a lot of energy and moisture (so I’m told), and there’s the potential for leakage and damage, even inside a commercial pot tent. This is not something any property owner would want.

Another interesting cannabis fact: almost two-thirds of people believe a home where weed has been smoked becomes devalued over time (the same holds true for a place with heavy tobacco exposure). Plus almost half of Canadians think a property where cannabis plants have been cultivated should be worth less than one which has been weedless.

Finally, what about cannabis as an investment?

Disaster. After an initial flurry of speculative money was made, this sector has done little but burn up investor equity. The main weed ETF has lost half its value this year, and things look glum. Legal weed is too expensive, which has pushed users back into the arms of street dealers. Initial stock valuations were based on hype, not revenues – which have failed to materialize. Some cannabis companies turned out to be run by dinks. And now we’ve got the vaping scare going on.

How was this ever a good idea?

In conclusion: don’t smoke. Don’t vape. Don’t fill your lungs with more than air. And rent not to anyone who does. Now, where the hell is my Guns N’ Roses cassette?

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October 10th, 2019

Posted In: The Greater Fool

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