Could Cannabis Legalization Impact the KW Real Estate Market?

The closer we get to legalizing cannabis, the more it appears the move will impact just about every facet of Canadian society, from residential tenancies to the workplace. Now, Canadian realtors are warning that it could have damaging effects on Canadian home buyers – including those in the red-hot KW real estate market. Are they right?

Cannabis and the Real Estate Market

The Canadian Real Estate Association (CREA), always at the forefront of lobbying on behalf of Canada’s vast real estate sector, was one of many parties to make an appearance before the Senate’s social affairs committee ahead of the Senate’s vote on Bill C-45, aka the legal pot bill.

CREA’s concerns with the bill lay in its provision to allow Canadians to grow a small amount of cannabis for personal use on their own properties – four plants, to be exact. CREA’s representatives stopped short of calling this a grow-op, but did not hesitate to compare it to actual, illegal marijuana growing operations.

“On the surface it sounds moderate, but the legislation doesn’t limit the number of crops or the size of each plant,” warns CREA Chief Officer Michael Bourque. “Four plants could yield over five kilograms a year, which has the potential to cause structural damage to dwellings and comes with associated health consequences.”

Initially, the legislation did limit the size of the plants to 100 centimetres in height. However, recognizing the impracticality of having police attend to people’s homes with metre sticks, this restriction was amended out before the bill left the House of Commons.

Bourque adds that properties that formerly served as illegal grow-ops are hard to sell, sometimes requiring between $50,000 and $100,000 in investment to bring up to a livable standard.

Four plants is hardly a grow-op, but he does raise an issue that is on many homeowner’s minds. What if their neighbours decide to grow cannabis? How will that impact the neighbourhood’s property values?

Should Home Buyers Beware?

And CREA has another concern: what about potential home buyers who could unknowingly be buying into a former grow-op?

“Former cannabis grow operations, even on a small scale, can pose significant health and safety issues for unsuspecting home buyers,” CREA President David Reid said. “These risks are often masked by owners of existing grow operations when the property is sold, making it very difficult for home buyers and realtors to detect problems like mould and fungus.”

While it may seem farfetched, this sort of revelation after already signing on the dotted line could hit home buyers hard. And since the law doesn’t provide for added protections for home buyers, it’s up to purchasers to take measures to ensure they know what they’re buying.

The issue is a reminder of the importance of having the right people on board when it comes to buying or selling a home in Kitchener-Waterloo, including the best home inspector, the best broker, and the best KW real estate lawyer you can find.