Investment property owners group expresses concerns re: cannabis legalization

Investment property owners group expresses concerns re: cannabis legalization

Investment property owners group expresses concerns re: cannabis legalization The Investment Property Owners of Nova Scotia (IPOANS), whose members hold ownership of nearly half of Halifax apartments, expressed anxiety at the clear possibility of tenants growing and consuming marijuana in residential units once the federal government pushes through with its stated commitment to legalize cannabis.

“It is the biggest issue we’ve faced,” organization president Jeremy Jackson told CTV Atlantic. “The normal apartment is not geared, electrically, ventilation-wise; they’re not geared for that sort of grow op.”

Supporters of legalization countered that properly installed and situated air filtration systems can remove any unpleasant odour from the cultivation and smoking of cannabis indoors.

Earlier this year, attorneys Joseph Grignano, Jonathan Kahn, Tara Piurko, and Grace Smith of Blake, Cassels & Graydon LLP provided a look at the the legal and procedural intricacies that the commercial real estate segment must be aware of; Bill C-45 (the Cannabis Act) does not have all the answers because “the provinces, territories and municipalities, under their own authorities, can set additional restrictions related to production, sale and consumption.”

“Careful thought must be given prior to leasing premises for the production, distribution or sale of cannabis. This is particularly true of multi-tenant commercial properties. Tenants in the cannabis business should not be held to a higher standard as compared to other tenants and, as such, they should assume responsibility to rectify reasonable and justifiable complaints by others (but not necessarily those that are unreasonable or ungrounded),” the authors wrote.

“At a minimum, tenants who intend to produce, distribute or retail cannabis from their leased premises should ensure that their leases do not afford their landlord automatic or unfettered termination rights should a neighbouring tenant take issue with odour, smoke or other issues related to the tenant's business operations,” the lawyers explained, adding that the lease agreed upon must have built-in mechanisms to correct such issues.

The trio’s explanation of the legal implications can be viewed here.

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