Why Marijuana is Illegal in Your Crested Butte Home?

Why Marijuana is Illegal in Your Crested Butte Home?

I attended a legal training seminar today and the speaker was Scott Peterson General Counsel of Colorado Association of REALTORS®.  Scott reviewed ten important legal issues for Crested Butte Real Estate Agents as well as homeowners. One of the topics discussed was the impacts of marijuana on the residential real estate market. Specifically grow operations.

People have asked me if I see a difference since Crested Butte has allowed medical marijuana shops or recreational retail shops – and I honestly say “no”. It is not visible in and around town, it is not allowed in public and so out of sight out of mind (although occasionally I can smell it especially during festive events and sometimes from on the chairlift of in a lift line).

Why Marijuana is Illegal in Your Crested Butte Home? While marijuana is legal in the state of Colorado and the state of Washington, (23 states and DC allow medical marijuana) and residents are permitted to own and grow up to six plants each – it is not legal at the Federal level. Translation it is ‘illegal”. You may think no big deal  the Feds under the Obama administration are mostly looking the other way (there are 8 enforcement areas where they do not).  It is true that on August 29, 2013 the US Justice Department issued an update to marijuana enforcement policy memo. However, below are the reasons you should pay attention – especially as it relates to growing of plants (grow operations) in residential homes. There were many horror stories told – most were rare and not meant to happen, but they did. Some of the dangers included: jerry-rigged and faulty electrical wiring to grow lights leading to overloading circuits, misuse of combustible fertilizers, excessive use of water for irrigation leading to the creation of warm and humid environments that plants and mold love.

Marijuana is still deemed “illegal” in the documents you have signed with these three entities:

1. Insurance Companies
2. Banks
3. Home Owners Associations (HOA)

1. Insurance Companies – This is certainly the biggest issue and area of exposure. What if you rent your home long-term to a tenant and they are growing marijuana plants in your home and the home has a flood from irrigation, or mold from the warm humid environment, or faulty electrical wires strung to grow lights that caused a fire and burned down the house? Or worse, a fire that burns down the house or condo building and kills someone.  Insurance companies deal across state lines and deem marijuana activity as “illegal” per the federal laws. Your insurance policy will have an exclusion that says if there is an “illegal” act that caused said incident they are off the hook. Guess who is on the hook?

“Mr. Smith will you please speak into the microphone this time, and state for the court that you knowingly allowed this growing activity in Your residence…?”

2. Banks – If you have a loan on your home, then your loan docs will also have some buried language that talks about “illegal” activity.

3. The HOA is unlikely to allow (especially in Condo and Townhomes) the growing of marijuana as they are opening themselves up to liability.

Scott Peterson said the commercial real estate market is a different situation as the many warehouses and commercial buildings that house these sophisticated grow operations have carved out leases and legalese to deal with these scenarios (but he said there has not yet been a big fire or other catastrophe to be tested in the courts).

Net net – if you are aware of marijuana grow operation in your home you should ensure it ceases. If you are not aware you should find out. You should have your lease updated to prohibit such activity – and most of all you should contact a local attorney in Crested Butte to advise you because I am not an attorney, and this is not legal advice.