Reaping what you sow is satisfying, but no matter how green your thumb, growing cannabis at the cottage may not be worth the risk. Lenders, buyers, and insurance companies still consider growing cannabis shady–though, one day it might be a selling feature
“Just because it is legal, it doesn’t mean it is a good idea,” says a spokesperson for the Fraser Valley Real Estate Board. “A lack of guidance when it comes to issues around remediation, not to mention lenders’ and insurers’ reluctance to take on the risk of a home where cannabis has been grown, means that homeowners who have grown cannabis might be in for an unpleasant surprise when it comes time to sell.”
A majority of Canadians supported the legislation that allows growing up to four plants for recreational use in most of Canada (except Manitoba and Quebec). But that doesn’t mean they want to own a home where it’s grown or smoked. A survey by Zoocasa, a real estate website, found that 52 per cent of Canadians wouldn’t consider buying a home where legal amounts of cannabis had been grown. Even more, 64 percent, thought smoking cannabis inside a home reduced its resale value.
Lenders and insurers are even less excited by cultivation. The number one concern is indoor growing, says Dustin Woodhouse, strategic consultant and mortgage broker at Dominion Lending Centres.
Cannabis plants tend to need a lot of water and warm temperatures to produce a good crop, ideal conditions for the growth of rot and mold indoors. Mold has health implications and rot and mold are hard to clean up and potentially dangerous structurally.
But to insurers and lenders, growing is growing, says Woodhouse. Even outdoor cannabis growing will stain the property with stigma.
Realtors will probably continue to advise their clients to ask about cannabis growing history. If they do, honesty is the only policy in the eyes of the legal system. And even if a buyer doesn’t ask, a mortgage broker and insurer probably will.
“Ultimately lenders don’t like any kind of risk,” says Woodhouse. “So whether it’s legal or illegal I think we’re going to continue to see lenders put their own stigma on these properties.”
The Insurance Bureau of Canada still considers growing cannabis a high-risk activity and it is not covered by most home insurance policies. The BC Automobile Association, which sells home insurance, says home insurance policies in Canada do not cover any loss related to cannabis growing. And growing cannabis could impact all insurance coverage.
That’s not going to change until the government steps in, says Kevin Brown, the manager of HomeLife Glenayre Realty in Chilliwack, B.C. Right now, a home that once grew cannabis will always remain so.
A checklist of steps a cottage owner can take to lose the stigma is a good first step, says Brown. Additionally, he’d like to see changes to the building code that outlines how to grow cannabis safely. A permitting process would likely relax lending and insurance issues and create a boom for builders installing designated grow rooms.
“We may just see the stigma of a grow room turn into a selling feature if all goes down the way I think it will,” says Brown.
Until then, Woodhouse suggests caution.
“Honestly, if your house doesn’t currently have that stigma of having had plants growing in it, that’s a wonderful thing,” he says. “Right now it’s a little bit too risky… to start growing plants because you could take 20 per cent, 30 per cent of the value off of your home. To save a few dollars to try and grow your own, it could be a $100,000 joint that you’re smoking.”
For more information on homeownership and growing cannabis visit, safe grow homes.