Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J U N E 2 0 1 7 13 \ AT L A N T I C \ C E N T R A L \ P R A I R I E S \ W E S T REGIONAL WRAP-UP cultivation for recreational use. The Task Force on Cannabis Legalization and Reg- ulation recommends that the four plants per residence have a maximum height limit of 100 centimetres, there is a prohibi- tion on dangerous manufacturing process- es, and reasonable security measures exist to prevent theft and youth access. It's all making landlords nervous. "We are not talking about growing tomato plants in the window," says Hutniak as cultivation requires large amounts of heat, light and humidity. "We have provisions under the Resi- dential Tenancy Act to seek possible evic- tion, but it is a hassle and costly," he says. These measures are reactive rather than proactive, he adds. Brody Stonehouse, general manager of AC&D Insurance Services Ltd., headquar- tered in North Vancouver, is familiar with the problems occurring as owners and landlords struggle with grow-ops in resi- dences. His agency is a major broker for the commercial growing operation sector, but it also a large insurer of single-owner, multiple-residential buildings. Insurers are stepping up to cover com- mercial grow-ops but not home-based grow-ops. "There is not really a good product out there for the homeowner," says Stonehouse. Some limited coverage exists, but it falls short of a lender's mort- gage requirements. He warns that those landlords or owners who fail to report a material change or use of the property run the risk of voiding their policy. Stonehouse says he is attempting to work with insurers to find a solution. But many have simply pulled back from insuring homes with grow operations not just in Canada but in the U.S. They deem it too high risk. "It is ridiculous," he says, adding that "there are other things that are high risk." Higher premiums could be charged, electrical inspections required and other terms and conditions set, he says. Stonehouse believes that insurance companies will have to step up in 2018 when the laws are implemented or lose a market sector. The alternative, he says, is that policies will simply come with exclu- sions and landlords will be faced with try- ing to remove tenants from a property. It is also dicey for insurance agents. Stonehouse says he attempts to work with clients, but he is obligated to report the grow-ops' information to an insurer. His advice to clients who run rental properties is to talk to their lawyer, especially as the new laws come into effect in 2018. Lawyer Steve Wallace, editor of Dolden Wallace Folick LLP's newsletter The Insur- ance Report, says the issue boils down to whether the growing of marijuana plants represents a material change in risk of an issued policy and whether not reporting a grow operation is misrepresenting the use of the residential property. One of the drawbacks in the licensing system is the lack of feedback to the land- lord, who may find his insurance voided. "Health Canada [when issuing a licence] should tell a landlord that the applicant [if a tenant] plans to grow medical marijua- na," Wallace says. Brokers and insurers also need to start asking questions regarding marijuana cultivation on site, he says, as the number of plants on site increases susceptibility to break-ins, theft and fire. "Four plants are not really going to increase the risk," he says. The down- stream danger lies in residences not stay- ing with the four-plant limit. "Already we are seeing that on the medical side." There is also the question of whether valuable marijuana plants can be consid- ered insurable property, he says. Price of Weed, an online index of mar- ijuana prices, cites the average B.C. price per ounce for higher-grade marijuana at about $200. Production (per plant) hinges upon light intensity, according to website Ilovegrowingmarijuana.com. "Experi- enced growers can produce about a gram of marijuana per watt of light [1 gram = 0.035 ounce]. So, a 400-watt HPS grow light can potentially translate to 400 grams or 14 oz of dried, usable cannabis," advises the site. More watts, more weed. Lawyer Naomi Rozenberg with Lesper- ance Mendes Lawyers in Vancouver, who deals with strata governance legal issues, says two issues arise for strata corpora- tions. One is the growing plants within a strata and the second is the smoking issue. "Growing small scale shouldn't impact the owners. The issue is larger-scale grow operations where it involves alterations to the strata lot, common property, the plumbing and the electrical," she says. It's here that strata corporations need to scru- tinize their bylaws. "Stratas should also have them reviewed by a lawyer to ensure they are enforceable," she advises. While smoking marijuana for rec- reational purposes falls under the same category as generally smoking cigarettes, medical marijuana smoking is more com- plex. In December 2016, B.C.'s Civil Reso- lution Tribunal issued its first decision regarding medical marijuana smoking in a suite of a strata corporation. The smoke was permeating other units. The tribunal found that the individual had breached the no-smoking bylaw and there was nothing to indicate that the individual could not ingest marijuana without smoking. Such decisions are not always straight- forward and come with the potential for human rights challenges in multiple- residential buildings. "Where someone is smoking marijuana for medical purposes, there is an element of human rights and the owner or tenant may have to be accommodated," Rozenberg says. — JEAN SORENSEN GROWING SMALL SCALE SHOULDN'T IMPACT THE OWNERS. THE ISSUE IS LARGER-SCALE GROW OPERATIONS WHERE IT INVOLVES ALTERATIONS TO THE STRATA LOT, COMMON PROPERTY, THE PLUMBING AND THE ELECTRICAL. NAOMI ROZENBERG, Lesperance Mendes Lawyers

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