It’s been a year since Canada legalized the recreational use of cannabis, amid fears that retail cannabis outlets would devalue neighbourhood real estate and that allowing plants to be cultivated in private homes would turn off buyers. But it seems Canadians are getting used to the idea and it’s not a major factor in their real estate decisions.
“It appears there were a lot of anticipated reservations surrounding cannabis retail and the negative impacts on local property values that did not come to pass,” says Christopher Alexander, EVP and regional director, Re/Max of Ontario-Atlantic Canada. “We have not seen a decrease in home sales or prices that can be attributed to legal cannabis. In fact, the opposite may be true.”
In centres where major cannabis producers have started production, Re/Max says they are creating “micro-booms” in some local communities. For example, in Smith’s Falls, Ont. a former Hershey factory is now home to Canopy Growth, the largest cannabis producer in the world. The factory employs 1,300 people.
“The impact of Canopy Growth on Smiths Falls cannot be understated, and it’s growing,” says Alexander. “The economy in the Rideau-St. Lawrence area is experiencing a boom, which is triggering home sales, which rose by 27.1 per cent year-over-year, and average prices increased 10.5 per cent. Demand is up and there’s a housing shortage in the region. We expect to see similar cannabis industry related growth in other regions as well.”
Re/Max says other communities set to benefit from cannabis production include Leamington, Ont. in the Windsor-Essex area, where producer Aphria has a facility employing 1,000 people. Home sales there are up 7.8 per cent year-over-year and average prices are up 9.1 per cent.
In Atlantic Canada, Breathing Green Solutions is operating in Wentworth, N.S. and Zenabis Global in Atholville, N.B. employs 420 people from the area, says Re/Max.
“The legal cannabis industry is already being credited with invigorating some lagging economies and as a result, those housing markets could soon see a flurry of activity,” says Alexander.
The pattern appears to be following trends set in the United States in states where cannabis has been legalized.
Early last year, a report by the National Collaborating Centre for Environmental Health identified several environmental health risks associated with growing pot at home: access and accidental poisoning, indoor air quality, inappropriate use of pesticides, and electrical, fire and radiation hazards. Various public health and landlord organizations, along with the Canadian Real Estate Association, asked the government to ban the cultivation of cannabis in the home.
However, the legislation passed, allowing cultivation of up to four plants.
Quebec and Manitoba banned home-grown cannabis, but recently the Quebec Superior Court ruled that Quebec’s law infringes on the jurisdiction of the federal government. It said the rule prohibiting the cultivation of cannabis for personal use was unconstitutional. The Quebec government says it will appeal the decision.
Meanwhile, a survey by Toronto-based Zoocasa says that Canadian homeowners and renters are becoming more comfortable with having legal retail cannabis outlets in their neighbourhoods. Forty-three per cent of survey respondents said they would be comfortable with an outlet operating in proximity to their home, compared to just 31 per cent who said that a year ago. Renters were more enthusiastic than homeowners – 56 per cent indicating they were comfortable with local outlets, compared to 36 per cent of homeowners.
Thirty-five per cent of homeowners worry that a cannabis dispensary would reduce the value of homes in their neighbourhood, compared to 25 per cent of renters.
However, 64 per cent of homeowners and 53 per cent of renters said that smoking cannabis inside homes will decrease the home’s value. Asked if cultivating cannabis in the home would dissuade respondents from buying it, 48 per cent of those surveyed said yes, down from 52 per cent in last year’s survey.
Zoocasa also found that 85 per cent of landlords would prefer that tenants don’t grow or smoke cannabis in the home. Fifty-seven per cent of landlords said they are more concerned about property damage now that cannabis is legal, and 55 per cent said they would consider charging higher rent in the future to cover potential cannabis-related damages.
While Ontario has been slow to roll out retail cannabis approvals, Alberta and B.C. are opening many outlets. A Re/Max survey found that 21 per cent of Canadians already live close to a retail outlet, and 72 per cent of those surveyed said living near one is not a factor in their decision to move.
“The increasing number of retail cannabis stores in Calgary shows no signs of stopping, with city officials having approved more than 200 since legalization,” says Elton Ash, regional EVP, Re/Max of Western Canada. “The presence of more stores may influence how home buyers approach certain neighbourhoods.”
But Ash says, “Even with changed attitudes, the idea of NIMBYism still looms in the background. But for the time being, acceptance and adoption seems to have been pretty positive. The market is expected to expand even further with the legalization of topicals and edibles in December of this year, which could pave the avenue for even greater growth of the industries associated with legal cannabis. There’s clearly an appetite for it.”
