If Medical Marijuana Businesses Are Legalized In Oklahoma What Clauses Should Your Lease Include?

As Oklahoma citizens consider State Question 788, landlords and property managers need to know how to address medical marijuana use in their buildings.

The supremacy clause in the U.S. Constitution says that states must not (and cannot) enact laws that conflict with Federal law—but states have been doing just that when it comes to legalizing marijuana. Until now, the Federal government’s marijuana policy has been to essentially turn a blind eye to the changing marijuana laws. And now Oklahoma will consider SQ 788 and possibly another ballot measure in 2018 to legalize medical marijuana. Half of the states, including Arkansas, and the District of Columbia have already legalized medical marijuana so it is a safe bet that marijuana will be legalized in some form in Oklahoma. Although cannabis remains illegal under Federal law, the U.S. Drug Enforcement Agency — which made marijuana a primary target in its “war on drugs” — is considering reclassifying it as a Schedule II drug, which could open the door to decriminalizing pot on a Federal level.

As a result, Oklahoma landlords and property managers could face new considerations when it comes to how marijuana laws affect their lease agreements. There are a number of scenarios related to marijuana legalization you could find yourself in, but if you stay informed, you can take steps to address any changes in the legal landscape.

If Oklahoma Legalizes Medical Marijuana…

Landlords and property managers are not required to accommodate recreational pot use under state law, but they may choose to make some exceptions for tenants who use marijuana for medical purposes. Still, that doesn’t mean you have no control over how it’s used inside your building. And unless federal law is changed, you may still prohibit marijuana use in any form.

One of the first things you need to decide is whether you want to allow smoking of any kind in the building (e.g., rent houses). Tobacco, for example, is a legal substance nationwide, but most property and business owners — restaurants, bars, apartment buildings — have the right to ban smoking cigarettes inside. The case for marijuana is no different.

You can easily add a few sentences to your lease agreement prohibiting smoking or using tobacco or cannabis on the property. However, there are other ways to use medical marijuana besides smoking it, such as using a vaporizer, eating THC-infused edibles, or using cannabis tonics and extracts. You could choose to specify which types of usage are allowed onsite, as long as you include this clause in the lease agreement.

It is extremely important for landlords to recognize that they may be dealing with a medical marijuana tenant who may have a disability as defined under the Fair Housing Act. So, for example, it would not be a good policy to reject a rental applicant because the person uses medical marijuana to treat a disability. It may be better to simply inform the applicant that smoking marijuana or growing plants is not allowed on the property, and give the disabled applicant the opportunity to decide whether to pursue the vacancy (or use other forms of medical marijuana such as edibles). Past drug addiction also is protected under anti-discrimination statutes, and is not a topic that should be explored during tenant screening.  Because the use of marijuana remains a Federal offense, there is an argument that you may deny a reasonable accommodation claim for the use of medical marijuana under the Federal Fair Housing Act. However, the Federal Courts are not in agreement on this issue and the law is changing. In the employment area, courts have denied medical marijuana as a reasonable accommodation. Given the Federal government’s express intention to not allow US Department of Justice enforcement of the law prohibiting the use, sale and cultivation of medical marijuana (Specifically, see page 230: Section 537 of the Consolidated Appropriations Act of 2017), this may lead Oklahoma state courts to be more lenient when it comes to requiring reasonable accommodations.

What Can Landlords Do to Regulate Marijuana Use?

There are a number of strategies that landlords may employ to prohibit marijuana use. It is helpful to remember the reasons why landlords may want to regulate marijuana — for instance, to minimize tenant complaints, to minimize property damage, to reduce crime, and so on. The most encompassing strategy is to prohibit marijuana possession and use because it is illegal under Federal law.

If Oklahoma does legalize medical marijuana, it will very likely apply only to tenants over the age of 21. Those landlords who manage student rentals and typically deal with younger tenants, would want to ban marijuana use entirely. Marijuana use or cultivation may be viewed as a disturbance which violates other tenants’ quiet enjoyment.

Here are some marijuana addendum clauses that can be included in a lease to specify the approved cannabis use:

  1. The use of tobacco and cannabis in accordance with state law is allowed on the Premises. Prior written consent of the Landlord is required before medical cannabis may be grown on the Premises.
  2. This is a nonsmoking residence. No smoking, including medical marijuana, inside the home or on the Premise is permitted. However, consuming medical marijuana with a vaporizer or in cannabis edibles, tonics, or concentrates is permitted.
  3. No recreational or medical marijuana may be grown or consumed on the Premises by the Tenant(s) or guest(s) without the prior written consent of the Landlord. 

If Oklahoma Does Not Legalize Medical Marijuana…

Then you don’t specifically need to address cannabis in your lease agreement because it automatically falls into the category of illegal activity. But — and this is a big but — with legal attitudes toward marijuana changing as fast as they are, your opportunity for recourse may become more complicated if you don’t explicitly address its use. You should include an anti-drug policy in your lease agreement, or include an anti-drug and crime addendum specifically outlining its prohibited use. Here’s an example:

“Usage of cannabis and any other federally prohibited drug is not allowed on the premises. Further, tenant and their guest(s) may not engage in any illegal drug-related activity, including but not limited to medical cannabis on or near the premises. Landlord may terminate this agreement if tenant and/or guests engage in such activities. If this provision is violated, tenants will be subject to charges, damages, and eviction. Tenant forfeits their security deposit if there is any evidence of cannabis use on the premises.”

Can You Evict a Tenant for Using Medical Marijuana?

Currently in Oklahoma all marijuana is banned, so issuing an eviction notice to a tenant who violates your anti-drug policy or anti-marijuana clause is fairly straightforward. But even if medical marijuana is legalized, you have the right to evict tenants who violate the terms of your lease, which would be an eviction for engaging in federally illegal activity. If you ban smoking marijuana — but not other forms of consumption of the drug — and a tenant continually violates that term, you can evict. This is why it is so important for a landlord to clearly state the rules concerning marijuana use in their lease agreements.

Can You Ban Growing Marijuana on Your Property?

When it comes to cultivation, you would want to require tenants to receive written consent from the landlord before growing cannabis on the premises. The language of the written consent should allow the landlord or property manager to inspect the unit from time to time to ensure that tenants are not growing more cannabis than is legally allowed.

Something to keep in mind: Cultivation often requires higher electricity and water usage—and plants require a lot of moisture, which can be harmful to the building. So you have very legitimate reasons to prohibit all cultivation on the premises.

Final Thoughts

After you have a marijuana policy in place, be sure to enforce it consistently among all tenants. “I would advise a landlord that you need to uniformly enforce the rule,” says Oklahoma Real Estate lawyer Brian Huddleston. “You can’t just pick and choose, because then you could face some discriminatory blowback.”

Hopefully, landlord-tenant disputes about marijuana use will be covered by a well drafted lease agreement. Complaints typically come from other tenants who are concerned about marijuana smoke or odors. If you find yourself in this situation, act quickly in devising a solution that works for all parties—for example, perhaps the marijuana user would happily switch to edibles.

Over the last 20 years, the number of states allowing use of marijuana has been increasing, and with a recent poll showing over 60% of Americans support legalization, we can expect that trend to continue. The implications for real estate are numerous. The conflict between Oklahoma and Federal law creates extra considerations. Owners/managers should take care to be up-to-date on the laws, and ensure their lease provisions specifically address their policies related to these laws along with any other special considerations.

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One response to “If Medical Marijuana Businesses Are Legalized In Oklahoma What Clauses Should Your Lease Include?”

  1. The legal rules governing the cannabis market are complex, fast changing, and contradictory. I can assist cannabis related businesses to comply with applicable law and counsel on the risks to participants in this emerging marketplace. Brian Huddleston

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