It has been nearly one year since cannabis was legalized in Canada – but has the haze cleared from how Canadian home buyers and sellers feel about its presence?

When Bill C-45 was passed into legislation last year, there was a considerable amount of uncertainty within the real estate industry. Would the presence of legally grown cannabis still stigmatize a home in the eyes of prospective buyers? Could a newly opened dispensary devalue nearby homes? And what would the implications be for those who owned rental properties, with tenants who wished to grow and consume within their units?

As it turns out, Canadians are starting to relax their view in regard to some – though not all – of these issues, according to a new national survey conducted by Zoocasa. The findings, which were gathered from responses from over 1,300 Canadians between Sept. 17 – 29, 2019, focused on the following topics:

• Consumption and cultivation of cannabis in private residences


• Living in close proximity to where cannabis is sold


• Awareness of landlords, renters and condo dwellers of their rights and the rules that govern cannabis usage in their homes

 

Let’s take a look at the findings.

Under Bill C-45, Canadian households (with the exception of Manitoba and Quebec) can grow up to four plants within their private residence, to harvest for their own consumption. While a few plants are a far cry from a full-scale criminal grow-op, there were concerns at the time that home buyers – and insurers – would still stigmatize the property in the same way.

However, the survey reveals that Canadians are feeling more positively this year in regard to legally grown plants in the home – 48 per cent indicated they would still be deterred from purchasing a home where the plants had been grown, down from over half last year.

 It should be noted though, that millennial home buyers – arguably making up for the largest proportion of the first-timer segment – are far less likely to be dissuaded by a few legally grown plants; just 38 per cent agreed they would not buy the home, compared to 53 per cent of a combined total of gen xers and boomers.

The survey results also indicate that Canadians are less worried about cannabis dispensaries operating in close proximity to their homes. Forty-three per cent of respondents said they’d be comfortable with it, up from just 31 per cent last year. Again, millennials were the least likely to be troubled by these businesses nearby, with 56 per cent indicating they were comfortable, compared to 38 per cent of older generations.

As well, respondents were less likely to believe that nearby dispensaries could hurt neighbourhood home values, with 32 per cent of respondents indicating that dispensaries would have a negative impact on nearby home values, down from 42 per cent last year. Homeowners were more likely to agree with the sentiment, at 35 per cent, compared to 25 per cent of renters. Again, millennials are less likely to be concerned, with 24 per cent in agreement, compared to 38 per cent of older generations.

Those who identified as owning rental properties, however, continue to express high levels of anxiety around legal cannabis in the home. A whopping 85 per cent of landlords stated they would prefer a tenant who does not consume the drug, or intend to grow it in the home, while 57 per cent said they were concerned about increased property damage as a direct result of legalization. Further, 55 per cent said they would consider charging future tenants a higher rent to offset these perceived future costs.

When providing services to brokerage clients, agents have a fiduciary duty to provide all the information they can about a prospective property – and that includes whether cannabis has been cultivated or consumed on the premises. Smoking it indoors, in particular, continues to be a turn off for buyers, with 61 per cent of Canadians saying it would devalue a home.

While the presence of four legal plants will no longer require a home to undergo a remediation process (unless there is related water or electrical damage as a result), it’s still important that homeowners understand the risks growing at home can pose to their properties, from fire and flood, to increased theft. Urge clients to disclose their intentions with their home insurer to ensure the activity will be covered in the worst-case scenario.