How will cannabis legalization affect Toronto real estate?

Did anyone walk around the Entertainment District while King St. was closed for the Toronto International Film Festival? I did, and I noticed something. There were at least two booths set up advertising some sort of product or information about recreational cannabis use.

Recreational cannabis will be legal in Ontario next month. In my circles, there’s either a positive or neutral stance on the matter, for the most part. As the hype builds, I can’t help but wonder how it will affect the Toronto real estate market and the rest of the GTA.

First, here’s a rundown of the upcoming legalization. You have to be 19 years of age or older to buy, use, possess, or grow recreational cannabis. Same goes for tobacco and alcohol.

You will only be permitted to use recreational cannabis in a private residence, including your outdoor space. This includes multi-unit dwellings (condos or apartments). The province states that if you live in a condo or apartment, or if you’re renting, cannabis use may be outlined in your building rules or lease agreement. That means a condo board can decide you aren’t allowed to use cannabis on your balcony, or your landlord can prohibit use on their rental property.

When it comes to growing your own recreational cannabis, Ontario is allowing four plants per household (not per person). Again, this will depend on your building rules or lease agreement. You will be able to purchase legal seeds from the Ontario Cannabis Store online.

So, how can recreational cannabis affect the housing market? Overall, I don’t think it’s going to have a big impact, but I won’t be surprised to see many condos banning it, and landlords prohibiting the use and growing on their premises.

While I’m indifferent to cannabis use – whatever you do in the privacy of your home is okay with me as long as you’re not harming anyone – I understand there is a stigma attached to it, and it could very well affect the value of a home.

Take smoking for example. If you walked into a house and the baseboards and walls were yellowed and the stench of stale tobacco filled the air because the owners smoke indoors, you’re not going to buy that house unless you get a great deal and/or plan on gutting it. If the house across the street has the same floor plan and isn’t damaged from smoke, that’s the one you’ll buy.

This is probably a long shot, but I wonder if any condo developers will take the leap and include gardening containers specifically for cannabis as an amenity. I’m seeing gardening plots being included in some downtown condos, and if growing cannabis plants is legal, then I don’t see why this wouldn’t eventually be a thing (might take a while to get to this point).

I do foresee a balancing act. If a large amount of condos and landlords decide to prohibit recreational cannabis use, then buyers and tenants who value the freedom to indulge will gravitate to the buildings and units where they are allowed to partake.

But what happens if a condo becomes known for being a condo where everyone smokes weed? Is that a bad thing? Some investors may think so. Though cannabis is seemingly a casual drug and people are already using it illegally, I still think it’s going to take some time for it to be widely accepted the way smoking tobacco is (many landlords prohibit smoking cigarettes as well).

And what happens if a condo owner is renting out a unit in a building that allows recreational cannabis use, but doesn’t want their tenant using cannabis in or outside the unit? What about the flip of that – the condo doesn’t allow cannabis use in the unit, but your landlord says it’s okay with them? I believe the building rules take precedence, but I think there will definitely be conflicts.

The conflicts will be between landlords, tenants, owners, and condo boards – but also between residents. I know a few people who live in condos, and I’ve heard them complain about a neighbour smoking indoors or cigarette butts falling onto their balcony. The condo board’s responsibility is to act on behalf of its tenants, and if there are numerous complaints, then stricter rules will be put in place.

There will definitely be road bumps as legalization takes effect, but this is 2018 – I believe the Toronto real estate market will come out unscathed. In my opinion, cigarette smoke is way more offensive, and we’ve been dealing with that since forever ago.