Realtors warn legal cannabis home cultivation could undermine property values

With the full legalization of recreational cannabis expected in just months, the country's real estate agents are warning that provisions allowing for home cultivation of marijuana plants could undermine property values.

In an appearance before the Senate's social affairs committee now studying Bill C-45, the cannabis legalization bill, the Canadian Real Estate Association (CREA) said the Liberal government's plan to allow so-called "home grow" could lead to the spread of mould and other fungi in residences across the country — which could result in some costly surprises for home buyers.

"There's absolutely no question it impacts the value of the home," Michael Bourque, chief executive officer of CREA, told senators, adding the physical effects of a grow op can often go undetected during a home inspection.

The Liberal government said it plans to limit home marijuana growers to four plants per household. The government initially intended to limit plants to 100 centimetres in height, but the House of Commons approved an amendment that removed such a restriction.

"On the surface [four plants] sounds moderate, but the legislation doesn't limit the number of crops or the size of each plant. 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," Bourque said, noting the use of fertilizers and pesticides in the growing process could exacerbate environmental health risks in a home or a multi-unit dwelling that shares air circulation.

Former grow-ops hard to insure or sell

There are currently no provincial remediation standards for the safe re-occupancy of former marijuana grow operations, Bourque said. Many mortgage companies are reluctant to insure homes once used for that purpose, he said, which makes selling them more difficult.

The Ontario Real Estate Association (OREA) estimates remediation costs to restore a former grow op to a livable standard can run anywhere from $50,000 to well over $100,000.

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Bourque warned that landlords across the country are already scrambling to address the risk of tenants growing plants in their apartments, adding he knows some property owners are busy converting apartments to condominiums, which allows them to more easily impose stricter regulations — or an outright ban — on cultivation in units.

He said such a conversion could push out low-income tenants or affect already-constrained rental markets in the country's big cities.

More than 400 condo boards in Ontario already have implemented tough bans on pot cultivation to avoid some of the pitfalls that come from cultivation in a shared space.

"People voted for the legalization of cannabis [in the last federal election] but home-growing is a whole different thing and it unleashes all kinds of problems ... I don't see the solution it's providing," he said.

Bourque said his association wants the federal government to implement stricter regulations — beyond the four-plant limit — on home growth before allowing home cultivation to occur. Provincial governments in Manitoba and Quebec already have said they will forbid home cultivation entirely.

'I think this is an exaggeration'

Jonathan Page, a botanist who has studied cannabis extensively and serves as the CEO of Anandia Labs, said he doesn't expect a new flood of grow ops to result from the bill and predicts most Canadians will simply opt to buy the product from a licensed provider.

"I think this is an exaggeration. Canadians can produce their own beer and wine at home, grow tobacco for personal use, and yet the vast majority buy these products from stores," he said.

We're not looking at a sort of Breaking Bad kind of scenario.- Ontario Independent Sen. Ratna Omidvar

Page said that while cannabis has a smell that neighbours can find unpleasant, that effect can be mitigated through a proper ventilation system.

Independent Ontario Sen. Ratna Omidvar also suggested that "four plants does not make a grow-op ... "

"We're not looking at a sort of Breaking Bad kind of scenario," she said, referencing an American cable drama about a teacher-turned-meth dealer.

Omidvar said most Canadians — 93 per cent of the 30,000 Canadians the federal government consulted before rolling out its legalization — are supportive of home cultivation.

Ontario Liberal Sen. Jim Munson said some of the warnings he heard were tantamount to "reefer madness," adding there must be tens of thousands of places where Canadians are already growing cannabis in their home illegally.

"It hasn't seemed to have caused a major problem," he said.

Bourque noted that, even though the drug is currently illegal, B.C. Hydro found that more than 40,000 homes in that province were being used to grow cannabis indoors — a number that is projected to increase when criminal sanctions are removed as a result of C-45.