Property Management Blog

Marijuana and Your Rental Property: What Is the Right Policy for You?

David Swaim - Monday, June 25, 2018

To rent or not to rent? When it comes to marijuana, that is a very serious question. While there may be benefits to renting to tenants who use medical marijuana, there are certainly many drawbacks to consider. As a Phoenix property management company, we stick to federal law. While Arizona might allow medical marijuana, the federal government stills considers it illegal. Until the federal and state governments are on the same page, our property management team's first goal is doing what is best for owners.

The State of Marijuana in Arizona

Right now, the only type of legal marijuana in the state is through medical marijuana. In 2016, the state tried to legalize marijuana completely with Proposition 205. The measure failed, so the law remains the same.

In Arizona, medical marijuana was first legalized in 2010. The law, Proposition 203, passed with 50.13 percent of the vote. Today, there are more than 122 medical marijuana dispensaries in the state. Recreational marijuana continues to be illegal. To use medical marijuana, the individual has to have a medical marijuana card from specific doctors in the state.

Currently, the law allows medical marijuana patients to have 2.5 ounces for every two weeks. If the patient lives more than 25 miles away from a dispensary, they can grow 12 plants. Once the marijuana is purchased, it can only be used on private property. Right now, there are estimated to be more than 100,000 medical marijuana patients in the state. To be considered a patient, they have to have at least one condition listed in the Arizona Medical Marijuana Act (AMMA).

Marijuana Use and Your Property

For Phoenix property management, a decision has to be made whether to allow it all across all rental properties or not. While it may increase the number of applicants, it could also hurt your business in the long run. In terms of benefits, allowing medical marijuana may encourage long-term tenants. An increase in lease renewals can help boost your bottom line by lowering vacancy rates. Instead of having to check for damages and do repairs every year, you can keep your property repair costs down.

However, there are some obvious issues with allowing tenants to smoke marijuana. If they smoke marijuana indoors, it may leave a lasting odor or damage the home. You will end up doing more repair work in between tenants. One of the biggest issues is the negative stigma attached to it. You may naturally worry that allowing marijuana could encourage crime near or on your property. Whether this actually happens is up to debate at the moment. Complete legalization of marijuana actually lowered violent crime rates in states that bordered Mexico by a whopping 13 percent. In Colorado, a district attorney famously said that the increase in violent crimes and deaths was from marijuana. Debates abound about the subject.

How We Handle the Marijuana Question

We are not interested in breaking any laws, so we never recommend policies that allow recreational marijuana at a property. Since any marijuana use or possession is illegal under federal law, Service Star Realty does not allow smoking in homes.

Part of our policy recommendation is also driven by concerns about secondhand smoke. Any smoke can become a health issue. It can also potentially stain or damage the interior of your home. As a rule, we do not allow smoking of any substance in the homes. This is a logical approach, but it also adds clarity for the tenant. No matter what the substance is, the lease does not allow it to be smoked within the home.

In terms of possession, we recommend following the federal law. While the federal government has mostly avoided conflict with the states over marijuana laws, there is no guarantee that this trend will continue. As long as marijuana is illegal on a federal level, Service Star Realty recommends following the federal laws. We avoid directly confronting the issue by banning any type of smoking in the homes, but our position as your property manager is to exercise caution on this topic.