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How Marijuana Laws Impact Your Tenants & Property: Today It’s a Bit Hazy

How Marijuana Laws Impact Your Tenants & Property: Today It’s a Bit Hazy

Marijuana. Whether or not your tenants can grow, store, or use it in your buildings is rapidly changing. As of mid-May 2015, 27 states and the District of Columbia have passed laws legalizing cannabis, the marijuana plant, for medicinal or recreational purposes.

But the details of marijuana laws vary widely by state, including the amounts permitted. Consider just these three examples of states that allow marijuana for medical reasons:

  • Connecticut passed a House bill that allows a one-month supply (with the exact amount to be determined).
  • Alaska passed a law by a ballot measure that permits one ounce for use and the possession of six plants — three mature and three immature.
  • Colorado’s ballot amendment says it’s legal to have up to two ounces for use from, like Alaska, three mature and three immature plants.

Not surprisingly, laws applying to recreational use are far stricter. Only Alaska, Oregon, Colorado, Washington, and D.C. residents can possess “small” amounts of marijuana — whatever that actually means. The decision isn’t clear-cut, which makes it hard to know what dos and don’ts to put into a lease.

What is known, though, is that this issue must be addressed in the lease, which also must be adapted as the legal landscape evolves, says real estate lawyer John Schepisi, founding partner of the firm Schepisi & McLaughlin, P.A., in Englewood Cliffs, New Jersey. “I see a number of states as holdouts for legalizing it for medical purposes, but in the next five to ten years, I expect that to change,” he says.


Conflicts between state & federal marijuana laws

The federal government hasn’t changed its law, listing cannabis as a Schedule 1 drug under the Controlled Substances Act of 1970, which means the government thinks marijuana has the potential for being abused.

The exact crime — and punishment — depend on numerous factors, such as:

  • Whether someone is arrested by state or federal officials
  • If the state has decriminalized use
  • The amount in possession
  • Whether the person has a previous record

And herein lies the conundrum. Tenants in a more marijuana-friendly state like Colorado can use it where it’s legal, but the person next door may object to its smell or usage. That neighbor could contact the Board of Health, or a police official, and file suit in a federal court. How do you protect yourself and the building legally, and how do tenants or residents protect themselves?

On the other hand, if you don’t permit marijuana to be used in a state that allows it, you could be sued for discrimination. In either case, hiring an attorney and going to court can be expensive and time-consuming.

For protection, Schepisi suggests at least having a clause in the lease that says residents must comply with all state laws, and then decide how you’ll handle the conflict if it arises. In the case of a condo or cooperative building, perhaps let the board decide.

Or you could make judgments on a case-by-case basis. “You might decide to heed state laws and look the other way regarding federal law for now if the marijuana is for medical reasons but not if it’s for recreational purposes,” Schepisi says.

Attorney Bret Sachter and his Seattle firm focus on business and real estate and have helped consumers through Avvo, an online site that connects attorneys and consumers. Sachter says you might, as property owner or manager, prefer a drug-free, blanket-prohibition policy that follows today’s federal guidelines.

But what you decide will most likely depend on your moral and legal mindset, and, perhaps, how tenants in the building feel — particularly if they have an ownership stake, says Sachter. And finally, to make sure your decisions are always crystal clear, have your attorney include the proper language when drafting new leases or updating existing ones.

Courtesy of Buildium