State vs Federal Drug Laws

[Joseph M.]

Coming from NJ to Colorado and now owning some property in Colorado, I am wondering what the responsibility is for landlords especially around marijuana smoking and growing. I know here in Colorado it is legal to smoke and grow (I think up to 6 plants). What are the landlord's responsibilities around this and how have you as a landlord protected yourself? 

[Max Gradowitz]

I'll bite, a little. People ask me this in California all the time.  We recently went the way of Colorado with the recreational legalization, so many landlords have these types of questions.

As a landlord and an adviser to a lot of landlords here in CA, I don't see any realistic issues with whether your tenant uses cannabis or grows a small amount within the bounds of state law.  Even if the federal government were to crack down on cannabis, which they have the legal right to do (Google federal preemption), they realistically will likely never take the time to do anything with small time users and growers.  Otherwise, half the population of California and Colorado (and probably every single tenant I have!) would be at threat of being arrested all the time.  If everything is within the state laws, what I really see in the real world is people buying and using cannabis often, and even growing in small quantities within the local laws, and nobody cares, state or federal.

Now, I will say, it is important to protect yourself by how your attorney words your lease agreements.  You should ask your attorney (I would personally try to find someone that markets themselves as a marijuana business attorney actually) to draft a rental agreement that includes as grounds for eviction any growing, using, selling, possessing or anything else pertaining to cannabis (which a good local RE attorney will know the specific laws of).  Just be aware that my best guess is that over 50% of my (best) tenants use cannabis, its extremely innocuous and common here, so realistically no landlord I work with enforces this and evicts tenants based on this, unless it is very obviously against state law (large scale unlicensed growing for example).  If I enforced such a policy, I'd have vacancies galore.

If your commercial tenant is a large time grower on a large commercial scale, my thoughts would be different, particularly when it comes to federal preemption.  This is where it gets very complex and I shy away much more from saying it's not a big deal.

This is not legal advice for anyone, don't take it as such.  This is just informal talk about cannabis and real estate.