Landlord pays high price for renter’s medical marijuana grow-op
By Rosa Marchitelli
27 February 2017
The tenant had 60 plants growing near the laundry room, landlord Darryl Spencer says. (Darryl Spencer)
Longtime landlord Darryl Spencer was left scrambling for insurance
after discovering a tenant was growing dozens of medical marijuana
plants inside and outside his rental house.
When the landlord told his insurance company about the perfectly legal
grow-op, his coverage was cancelled, leaving him with no insurance, few
rights and a big cleanup bill.
Spencer says the downstairs tenant in the Kamloops, B.C., rental
property got a medical marijuana licence that allowed him to legally
grow as many as 60 plants without his landlord's permission or
A call from a concerned neighbour prompted Spencer, who is also a
retired fire inspector, to check out the home he's rented out to
different tenants for a decade.
He discovered a mess of extension cords, fans and bright lights packed
into a room filled with dozens of marijuana plants. The upstairs
tenant, a woman with a small child, was complaining about heat
radiating through the walls and electrical breakers going off.
I was worried about the fire hazard
"I was worried about the fire hazard. That was my first thought because
of the extension cords, the use of electricity and that something could
catch fire," Spencer told Go Public.
Under new federal rules introduced last August, landlords have little
recourse if a tenant is growing licensed medical marijuana. They don't
even have the right to know it's happening. Yet it's landlords who are
being denied insurance coverage when a tenant is growing medical pot.
Go Public also found, while the federal government implemented the
rules, it wants local authorities to ensure medical grow-operations are
being set up and run safely. More than 30,000 people in Canada have
permits to grow cannabis for their personal medical use.
When Spencer notified his insurance company about the tenant's grow-op, Gore Mutual Insurance cancelled his coverage.
"They wouldn't cover claims to do with medical marijuana or air quality contamination," he says.
'You can lose everything you worked so hard for your whole life.'
—Darryl Spencer, landlord
In a statement to Go Public, Gore Mutual Insurance says it "does not
provide coverage for marijuana grow-operations regardless of their
legality because this type of operation in a residential building
presents inherent insurance risks."
Those risks, the company says, include "a greater likelihood of water damage, mould, fire, vandalism and burglary."
Under most basic home insurance policies, marijuana-related damages or
anything that companies believe is "high risk" is not covered.
That view is shared by many insurance companies, according to the Insurance Bureau of Canada.
"While regulations may allow for the legal growing of marijuana for
medical purposes, it does not change the structural risk grow-ops pose
to homes and condos," Andrew McGrath, spokesman for the Insurance
Bureau, tells Go Public in an email.
"The operation of a grow-op, whether legal or not, is still a high-risk activity."
Landlord jumps through hoops
Gore Mutual Insurance told Spencer it might reinstate his coverage if
he got rid of the tenant and took specific steps to ensure the house
was safe to live in.
The insurance company also wanted air and soil testing, plumbing and electrical inspections, and the house checked for mould.
Spencer did it all, while searching for another insurance company that would cover him right away. None would.
"I went all that time with no insurance which was pretty nerve-wracking
knowing there were many implications involved there. You can lose
everything you worked so hard for your whole life," he says.
Spencer paid him $1,300 to leave and returned his full damage deposit
The tenant did move out, but only after Spencer paid him $1,300 to
leave and returned his full damage deposit despite issues with the
All in, Spencer estimates he's out more than $5,000 in costs related to the medical grow-op.
Privacy trumps landlord rights
In February 2016, a Federal Court judge gave Health Canada six months
to come up with new rules that would give medical marijuana patients
better access to pot, allowing more patients to grow it at home.
Its response was the new Access to Cannabis for Medical Purposes Regulations, which came into effect Aug. 24, 2016.
"The new regulations do not require individuals who wish to produce a
limited amount in their residence to notify or seek the consent of
their landlords as such requirements would likely infringe on their
right to reasonable access to cannabis for medical purposes," Health
Canada spokesman André Gagnon wrote in a statement to Go Public.
Decisions made 'in a vacuum'
Landlord B.C., an advocacy group for landlords, says it respects the
importance of marijuana therapy for those who need it. But CEO David
Hutniak says the group believes property rights also are important.
"[Health Canada] basically made the decisions, from our perspective, in a vacuum," he says.
Spencer says he was worried about safety when he saw the amount of chemicals in the tenant's unit.
Hutniak says the federal government failed to provide clear direction
for landlords and insurance companies when it made changes to medical
Safety inspections not done
Under the new rules, Health Canada gives specific guidelines on how to safely set up medical grow-ops.
But when it comes to checking if safety rules are being followed, the federal department is leaving that to municipalities.
David Hutniak, CEO of Landlord B.C., says Health Canada should have
considered the impact on property rentals and insurance when approving
The problem, according to the development and engineering services
director for Kamloops, is federal privacy rules prevent local
authorities from knowing where marijuana is being grown.
"We don't get a list of the address, so we can't proactively go around and do inspections," Marvin Kwiatkowski says.
The tenant was also growing marijuana in a greenhouse on Spencer's property.
There also is no system in place to proactively check if tenants are
growing the allowed number of plants and following their permit.
Go Public put the issue to federal Health Minister Jane Philpott, but
her office declined an interview, saying the federal government's role
is to ensure people who need medical marijuana have access.
Double the cost
Two months after his insurance was cancelled, Spencer found a company
that specializes in covering medical grow-operations. The coverage cost
almost twice what he used to pay and has a much higher deductible.
After Go Public contacted his original insurer, Gore Mutual, it offered
to reinstate Spencer's policy for almost the same amount he used to pay.
Spencer took Gore up on the offer, and says it's the federal government that needs to make changes.
"This has been a big mistake and I hope it gets rectified soon."
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