Cannabis Growth and Cultivation Clauses
(Condominium Rules and Regulations) (Residential)

Summary

These cannabis growth and cultivation clauses may be included in the rules and regulations of a residential condominium to prohibit or regulate the growth and cultivation of cannabis within the condominium. These clauses contain practical guidance and drafting notes. In recent years, many states have legalized the medical and / or recreational use of cannabis. Some of these laws also permit the growth of cannabis in private homes without a commercial license, typically with a limit on the number of plants that may be grown (often referred to as the right to "home grow"). Additional regulations may be imposed limiting the number of plants in any particular growth stage. In many states, the right to home grow is limited to cannabis that is grown for medical purposes, and often, there are additional limitations such as that the plants are not visible from outside or are guarded by a security device. As of June 2024, 45 states and the District of Columbia have permitted some form of the medical use of cannabis, and 24 states and the District of Columbia have legalized some form of recreational cannabis use. The following maps summarize states that offer some form of medical cannabis and states that offer some form of recreational cannabis. The states in blue authorize some form of medical or recreational use, while the states in purple do not authorize any medical or recreational use. Visualization of State Laws on Medical Cannabis Map Visualization of State Laws on Recreational Cannabis Map In states where home grow is legal, condominium boards may nonetheless wish to prohibit or limit unit owners' growth rights. Common reasons include concerns over odor, increased water and / or electricity usage, increased insurance premiums, and mold / mildew risks. In addition, marijuana (the smokable form of cannabis) remains illegal under federal law. 21 U.S.C. § 812. See DEA Drug Scheduling. Although the federal government does not currently prosecute individuals for cannabis-related activities permitted by applicable state law, this may change based on prosecutorial discretion. Additionally, allowing cannabis growth in a condominium could still conceivably violate condominium loan documents or insurance policies that prohibit all illegal activities. As counsel to an association, you should also review any insurance policies covering the property prior to instituting any cannabis rules and regulations, as some damages may not be considered a covered event. In such cases, the rules should address how the unit owner will be held liable for any unrecoverable amounts. A board may also be concerned about liability in instances in which the association owns a unit, rents it out, and the tenant uses or grows marijuana with the association's knowledge. In such instances, the condominium could be subject to forfeiture of the unit. Additionally, a board may not be protected by the business judgment rule and member's actions might be ineligible for indemnification. Far less likely, though not completely outside the realm of possibility, are circumstances in which an individual is permitted to cultivate cannabis and later sells it. Here, it could be found that the board received proceeds of the sale, which could be a violation of federal anti-money laundering statutes. In general, a condominium can prohibit the growth of cannabis by individual unit owners when the prohibition is permitted by state and local law and the condominium's governing documents. It is important to carefully review all applicable state and local laws. In some jurisdictions, the ability of a condominium to prohibit home grow (as well as cannabis use) is specifically sanctioned by statute. However, there can also be carve-outs for the growth of cannabis for medical use. It is also important to review the condominium's governing documents. If the governing documents do not address cannabis, amending these documents as well as adopting a rule (which requires only board approval) is more likely to withstand challenge. (In some cases, the same state laws that permit condominiums to restrict cannabis rights also specify that any restriction must be contained in the governing documents.) However, amendments to condominium governing documents often require the approval of a supermajority of unit owners. If approval cannot be obtained, the condominium board may be able to rely on general prohibitions on violations of law (citing federal law) and creating a nuisance contained in the governing documents in conjunction with adopting a rule that prohibits or sets limitations on unit owner's right to home grow. These clauses provide a starting point, but they should be tailored to conform to the board's wishes and the requirements of applicable state law. Because cannabis law is evolving quickly, best practice is to carefully review state and local law before drafting any rules and regulations limiting growth and cultivation. Given the many open issues, a review of recent case law in the state is also recommended. For sample clauses addressing the growth and cultivation of cannabis, see Limitations on Cannabis Growth and Cultivation Clause (Condominium Declaration) (Residential) and Prohibition on Cannabis Growth and Cultivation Clause (Condominium Declaration) (Residential). For sample clauses addressing the use of cannabis, see Cannabis Usage Clauses (Condominium Rules and Regulations) (Residential), Prohibition on Smokable Cannabis Use Clause (Condominium Declaration) (Residential), and Limitations on Smokable Cannabis Use Clause (Condominium Declaration) (Residential). For an overview of materials on cannabis, see Cannabis Resource Kit and Cannabis: Guidance for Real Property Owners. For further information on the challenges faced by marijuana-related businesses when renting or purchasing commercial real estate, see State-Legalized Marijuana and Real Estate. For additional information, see Medical and Recreational Marijuana State and Local Law Survey. For nonsmoking clauses, see Non-Smoking Clauses (Condominium Rules and Regulations) (Residential). For sample condominium rules and regulations, see Condominium Rules and Regulations. For a template residential condominium declaration, see Declaration of Grants, Covenants, Conditions, and Restrictions Establishing a Plan for Condominium Ownership. For further guidance on condominium ownership, see Residential Condominium Resource Kit.