How Medical Marijuana Will Change Your Practice


Medical Marijuana

Medical marijuana has been decriminalized in some states. However, under federal law, landlords are permitted to decline rent to a user of medical marijuana. So where does Ohio stand? Here we’ll go over the Cole Memo, Ohio’s law in response, and how this law change may affect the Ohio real estate industry. Understanding medical marijuana laws and anticipated changes will help real estate agents manage their business.

The Cole Memo

In 2013, the US Justice Department implemented a doctrine called the “Cole Memo”. This was in response to the decriminalization of marijuana sales and consumption in some states. The Cole Memo outlines how states can operate legal marijuana programs and avoid federal prosecution. The Cole Memo says the federal government will leave a state alone if that state implements a strict regulatory framework. This framework includes a seed-to-sale tracking system.

This tracking system needs to monitor:

  • Growth
  • Distribution
  • And the sale of regulated marijuana.

This prevents diversion and creates a transparent, accountable market. It also prevents the distribution of marijuana to minors and other criminal enterprises.

Ohio’s Response

Ohio’s medical marijuana law became effective September 8, 2016, legalizing medical marijuana in Ohio. The Ohio Medical Marijuana Control Program (“OMMCP”) is expected to be fully implemented in September of 2018.

Other pending rules will apply to:

  • Processing
  • Testing
  • Dispensary
  • Patient/caregiver
  • And physician certificate to prescribe medical marijuana.

Some of the proposed regulations limit the form and variations of the marijuana. These regulations ensure the marijuana is not attractive to children. The regulations also authorize no more than a 90-day supply as well as prohibits smoking marijuana.

In Ohio, only those with one of 21 qualified medical conditions can be prescribed medical marijuana. Several of the qualified medical conditions are also medical conditions classified as a “disability” under Ohio’s fair housing laws. For example, epilepsy, multiple sclerosis, and cancer are qualified medical conditions and disabilities. Under Ohio’s fair housing law, a disability is a physical or mental impairment that limits one or more major life activities.

How is Affects Real Estate

This leads us to the OMMCP’s impact on real estate. Because marijuana is still illegal under federal law, landlords may decline to rent to medical marijuana users. On the other hand, landlords that refuse to rent to those using medical marijuana may be violating the state’s fair housing laws. Section 8 housing may require compliance with both federal and state law. Because Ohio’s law has yet to be implanted, it is unclear which way Ohio courts will rule.

Additionally, expect issues relating to mortgages that require owners to comply with both state and federal law. Although an owner may be legally using medical marijuana in Ohio, they are still technically violating federal law. It has been well reported that hash oil is extremely flammable and incidents of explosions are on the rise. Thus, it remains to be seen whether the use of medical marijuana will impact decisions of insurance companies on coverage. Current policies may except coverage for damage caused by illegal activities.

Like fair housing, legalization has had an impact on employer/employee rights. Many courts rule that employers retain the right to a drug-free workplace even if marijuana is decriminalized in their state. In your brokerage, consider whether there will be an impact on your E&O insurance and auto/casualty insurance policies. Brokers should consider updating their policy manuals to address the use of medical marijuana.

Looking Towards the Future

On the upside, the new industry is expected to bring growth to the real estate industry. New dispensaries will need locations. The land will need to be procured for growing and processing operations. Research facilities will have to be developed to cultivate and sell medical-grade marijuana. Jobs and growth likewise aid continued growth in the residential real estate market.

The years to come will see both the implantation of Ohio’s medical marijuana program as well as the changes to Ohio’s real estate professions. I will keep you posted on new rules and court decisions that may impact your practice.

This was a topic covered at our most recent CE event. If you’ve taken your real estate classes at Hondros College, you are eligible to join our Alumni Association. This comes with many benefits including staying up to date on legal and regulatory matters that apply to the real estate industry.

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