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Up in Smoke - An Update on Marijuana

by | May 01, 2017
In November 2016 Ballot Question #4, which will allow for the recreational use of marijuana, was passed by Massachusetts voters in a fairly wide margin of 54% to 46%.

Under the new law, the use of marijuana for recreational purposes started on December 15, 2016. However, the sale of the drug from regulated retail stores will not be permitted until mid-2018. So, how will this new law impact real estate? Here are a few considerations to keep in mind.

The first thing to consider is that although legal under state law, marijuana remains a
Schedule 1 illegal substance under federal law. Up until this point, the federal government has taken the position that it will not enforce federal law in those states that permit recreational marijuana usage. However, there is no guarantee that they will keep this position in the future as more and more states change their laws to allow
for the use of marijuana.

Q: How will the legalization of recreational marijuana affect landlord-tenant relationships and the rights of each party?

A: As written, the law allows for landlords to prohibit the smoking of marijuana on their
property, but owners should be sure to check the language of their lease agreements to make sure the issue is covered. Just as a landlord may prohibit smoking of cigarettes in an apartment, they may also prohibit smoking of marijuana.

In addition, the cultivation of marijuana may be prohibited by the landlord. The MAR Forms Content Advisory Committee is currently working to add a lease addendum to
the MassForms Library to address these points.

Q: How will the new law affect residential transactions?

A: Like the laws in Colorado and other states, the law will permit residents to cultivate a certain amount of the drug in their homes for personal use. This could potentially impact the homeowner’s insurance policy if there is a loss due to issues related to water
damage, electrical fires and mold issues. When listing a home where cultivation is
occurring, it is prudent to have a conversation with the seller prior to any showings or open house. A seller should consider removing or relocating equipment during the listing period.

Finally, the new law provides cities and towns with some ability to regulate or prohibit the sale of marijuana at retail locations within their community. Issues related to local zoning, law enforcement, and taxation are all currently being discussed by the Legislature. It is likely that changes will be made to the legislation and additional regulations will be enacted this year.