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Mortgage Broker News | 18 Nov 2014, 10:41 AM Agree 0
One Canadian pot company has attained financing for its newest property, a deal which may signal a sea change in lender thinking about how they treat mortgage funding for legal grow-ups.
  • Dustan Woodhouse | 18 Nov 2014, 12:36 PM Agree 0
    That is a $26,7150.18 per mo payment.

    1. Far more than most applicants will be able to qualify for.
    2. Indicative perhaps of the potential profits to be had in that business.
  • Paul | 18 Nov 2014, 01:01 PM Agree 0
    $26,715 per month could be quite cheap for an operation of that size. The rate and payment actually sounds like the deal of a century considering the type of business.
  • Bev Gay | 18 Nov 2014, 03:11 PM Agree 0
    And this has to do with grow-ops how? Good grief this is a business and its business financing. Nothing to do with grow-ups. are you trying to mimic the National inquirer headlines.
  • Dustan Woodhouse | 18 Nov 2014, 03:38 PM Agree 0
    Actually it is (to me) a pretty remarkable and relevant story. Indeed it would be nice if legal grow-ops were looked at simply as 'business financing', thus far the lending environment has been quite hostile towards financing legal grow-ops. Concerns cited range from public perception to worries about gang involvement.

    The rate itself represents only a slight premium, but to me the more telling metric is the 7yr Amortisation. The lender is still looking to see their exposure reduced a rapidly as any loan I have seen. The lowest AM we have seen a client offered is 15yrs, and that is rare. 20yrs - 25yrs on a newer building is more common.
  • Aaron Vaillancourt | 18 Nov 2014, 04:35 PM Agree 0
    Financing a commercial greenhouse obviously makes sense in the context of commercial growing....not-so-much for a residential home being used for a temporary grow (individual Health Canada grower's licenses have all expired) that will require extensive remediation afterward.
  • James Resourceful Capital Financial Corporation | 19 Nov 2014, 03:01 PM Agree 0
    Yes, this is business financing. Not really a grow-op getting a mortgage. This is a marijuana licensed facility, major difference.
  • Dustan Woodhouse | 19 Nov 2014, 03:09 PM Agree 0
    Just to be clear Bev, Aaron & James.

    I am clear we are talking about a legitimate legal and compliant business being run from a commercial space.

    However, (Commercial) lenders do weigh carefully in their approval decisions the nature of the business that they are providing financing too.

    I have had occasion to work on financing with three different such groups over the years and the first hurdle is often assisting the clients in understanding that no manufacturing business is meant to be run from a residence.

    However even when we start looking for commercial space they (legal marijuana facilities) often run up against strata bylaws over use or municipal rules over use.

    Once they find a compliant commercial space, again there are significant challenges in finding a Major lender interested in offering any level of financing for business in this specific arena.

    It is not looked at as 'just another business'.

  • Naveen | 06 Jul 2016, 08:45 PM Agree 0
    I am a first time home buyer looking for a condo in toronto. I was guided by a salesperson from a registered brokerage office to sign a firm deal on a property in Scarborough location. I had no condition on finance as I got pre-approval from one of the big bank. I waived the status certificate after reviewing with lawyer saying no concerns. Also I did a deposit of $10000.

    While processing my mortgage application bank identified the condo building itself was under do not list because of former grow op. My broker and lawyer advised me to approach other banks as well but am sent back for the same reason. I tried with the mortgage broker as well but no luck.

    The listing agent says that he is not aware of any such issues and he doesn't care if there was an grow op on the building common area. When I did a quick search in the Google I got to know this was a big news in 2010 as condo staff were involved in the operation.

    The broker of record is not ready to discuss the next steps with me as he claims the issue is at the listing agent end and they don't have any responsibility to research the matter for me.

    We also have a clause in the purchase agreement that the seller represents and warrants for any illegal growth of substance in the property and the building and the structures etc.

    Currently my broker and lawyer is saying they are discussing the matter with the seller lawyer to get money back but they are not much positive about it.
    My lawyer is advising to file a lawsuit if they don't agree to return the deposit.

    I cannot handle any legal expenses to fight back for my money. I have no clue how to deal this issue.
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