Landlords and Renting to Cannabis Businesses

While Amendment 64 changed many things in Colorado, it largely left landlord’s rights intact.

Amendment 64 states that any owner of private property may prohibit marijuana possession, cultivation, and use on that property. Colo. Const. Art. XVIII, Section 16(6)(d). This applies to landlords.

• Clarity is key! Landlords should have specific provisions listing exactly what they want to prohibit. For example, if you will permit use of marijuana but wish to prohibit its cultivation the lease should expressly say so.

• Crime and Drug Free Lease Addenda are sufficient but not the best available option. These catch all provisions prohibit any illegal activity under state or federal law, which would include marijuana. However, when renting to prospective tenants it is a better policy to not hide the ball. This is especially true with so much misinformation prevalent in the community. If you wish to prohibit recreational and/or medical marijuana the lease should expressly say so.

• There is no requirement that you treat recreational and medical marijuana the same. You may allow medical marijuana as a reasonable accommodation while prohibiting recreational marijuana in all instances. We advise against this approach and recommend matching policies to prevent confusion among tenants.

• Communication is key. This is especially true for apartment style properties. Consider publishing your marijuana policy so that all tenants are reminded of the rules. An ounce of prevention is worth a pound of cure.

• At this time, marijuana use is considered a termination issue by Colorado courts, meaning that tenants need not be given an opportunity to cure their behavior. C.R.S. § 13-40-104(1)(d.5); C.R.S. § 13-40-107.5(3) However, as marijuana use becomes more accepted in Colorado there is a fair chance this will change. This makes having a clear marijuana policy even more essential.

• Another additional consideration is private nuisance. At its most basic, a private nuisance is the creation or maintenance of a condition on one property that creates an injury to something or someone on another property. A person may not unreasonably interfere with another person’s right to use and enjoy his or her own property. If you allow marijuana use on your property it is possible, although unlikely, it could rise to the level where the neighbors may consider bringing a private nuisance claim. Avoiding this kind of scenario is why communication is very important.

• Finally, there are civil forfeiture laws at both the state and federal level. C.R.S. 16-13-501 et seq.; 18 U.S.C. § 981 et seq. Forfeiture laws allow the government to take and sell property that is used for illegal activity. In some cases, if your tenant uses your property for illegal activity it could be subject to forfeiture even if the activity took place without your knowledge. On the federal level, marijuana is illegal and allowing its use could subject your property to forfeiture. For all practical purposes, the federal government has only gone after landlords of dispensaries and warehouse grows.

• In summation, the decision to allow or prohibit marijuana on your property is left to the landlord. There is no constitutional right to use marijuana on property you do not own. Landlords should look to the unique situations of their properties when arriving at their decision. Regardless of their choice, all tenants should be told of the policy in clear terms in both the lease and, where appropriate, by publication to the community.