Pot could create issues with federally backed housing properties

By: Molly M. Fleming//The Journal Record//August 21, 2018

OKLAHOMA CITY – Property owner J. David Chapman said to a crowd of housing owners, managers and developers that he has two concerns when it comes to medical marijuana. His first concern is compliance. If a multifamily housing property is developed using a federal loan, then marijuana is not allowed. The loan documents require that the property stays in compliance with federal law. His other concern is insurance or the lack of it. “If you participate in the (medical marijuana) marketplace, you can’t get title insurance if there’s medical marijuana in the building,” he said.

Chapman was on a panel at the Oklahoma Coalition for Affordable Housing’s annual conference, held Tuesday at the Downtown Medical Center Embassy Suites hotel. The other panelists were attorneys Chris Cotner and Chris Griswold, and Oklahoma Bureau of Narcotics Public Information Officer Mark Woodward.

Griswold said a building with medical marijuana in it, such as a growing facility, can’t get title insurance because there’s too much of a risk that the occupant could have its business seized under federal regulations. Chapman said a building can’t be sold without title insurance, so it will be difficult to complete a transaction.

When buildings are sold, they can’t be purchased with a bank loan. Cotner said there will be a lot of cash flowing when the industry opens its doors. Woodward said in other states, this cash has been laundered, and he expects it to happen here as well. Chapman said it’s likely that money will go into real estate. In regard to tenants, Chapman said he doesn’t allow any type of smoking in his properties, including vaping or cigarettes.

Metro Fair Housing Council Executive Director Mary Dulan was concerned about what can be done regarding people who have a disability and use medical marijuana. Cotner said tenants who use medical marijuana are allowed to be evicted from a rental property. He said that while the person may have a disability, marijuana is not prescribed by a medical professional in Oklahoma. It’s recommended. So the patient would not be within a protected class under the Fair Housing Act. “You need to let them out of their lease,” Chapman said.

Besides the smell, Chapman said there can be safety concerns for other tenants. In Denver, there was a significant spike in apartment fires related to people condensing marijuana into a concentrate with butane, creating hash oil, he said. Cotner frequently reiterated that while medical marijuana is allowed on the state level, it’s still federally illegal. “It could all be gone tomorrow,” he said.