How Cannabis Legalization In Canada Will Affect The Housing Market


This past October 17th, recreational cannabis use was legalized across Canada. Along with recreational use, Canadian cannabis lovers are now able to grow small amounts of marijuana plants on their property. This was a long awaited day for some, however, homeowners in Ontario are becoming worried about how it will affect the housing market. In Ontario, the number of legal marijuana plants per residence is capped at 4. This is providing a challenge to real estate agents whose clients are weary about marijuana plants on the premises. As a real estate agent, it is important to stay up to date with how the legalization of marijuana will affect the house selling process.

When representing a seller who has had marijuana plants on their property, it is important to know what information has to disclosed and what information can be disclosed. In Ontario, a home seller does not have to disclose if marijuana has been previously grown on the property. However, the representative of the buyer can ask questions regarding the growing a marijuana.

The only thing that a seller must disclose to a buyer are latent defects in the property. A latent defect is something that is something that poses a major risk to the residents of the home. An example of this would be a structural issues. So, unless a client has grown marijuana inside of their home and caused major structural issues, they won’t have to disclose this information to potential buyers.

However, even though the seller doesn’t have to disclose the information, there is technically nothing stopping the buyer from suing the seller for failing to disclose a stigma. A stigma is formed by an event that has happened in the past that can change the way the buyer views the property. An example of this would be past criminal activity. A stigma is different from a defect in the sense that there is nothing physically wrong with the building. Sellers do not have to disclose information about potential stigmas. Although, some feel it is a part of the due diligence of being a homeowner.

Although not all homeowners are aware of the history of their homes, it is wise to convince the seller to proactively disclose any potential stigmas. Potential buyers will appreciate the honesty, and may not even mind if marijuana was previously grown on the property.

Although some thought the day would never come, recreational cannabis is now legal in Canada. This is an interesting time for real estate agents, as the landscape of the Canadian housing market is now dotted with marijuana plants. As a real estate agent, it is important to know exactly how residential marijuana plants will affect the home selling process. For more information about how cannabis legalization will affect Ontario’s housing market, feel free to contact RE/MAX Hallmark.

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