A Modern Dilemma: Medical Marijuana Use and Program Compliance

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Owners and managers of affordable multifamily rental housing properties are faced with a relatively new conundrum: The growing number of states that have legalized the use of marijuana for medical or recreational purposes. The challenge includes what policies to adopt to remain in compliance with federal and state laws, such as regulations of the low-income housing tax credit program, U.S. Department of Housing and Urban Development, and USDA Rural Housing Service.

To date, only two states have legalized recreational use of marijuana – Colorado and Washington. A much larger number have enacted laws to legalize its use for medical purposes, including Alaska, Arizona, California, Colorado, Connecticut, DC, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington. Florida, New York, Ohio, and Pennsylvania have pending legislation or ballot measures on the issue.

The U.S. Drug Enforcement Administration (DEA) still lists marijuana as a Schedule 1 drug. Schedule 1 drugs are those with no currently accepted medical use and a high potential for abuse and are considered by the DEA to be the most dangerous. Besides marijuana, these include heroin, LSD, ecstasy, meth, and peyote. There is no indication that the federal government is anywhere near changing the categorization of these drugs.

Reasonable Accommodation

So how should affordable housing providers respond in the affected states when asked to provide a reasonable accommodation to permit medically prescribed marijuana?

For purposes of the federal Fair Housing Act, medically prescribed marijuana is not considered a required reasonable accommodation, since it violates federal drug law. Also, the definition of a disability under the Fair Housing Act states that current illegal use or addiction to a controlled substance is not considered a disability.

It is clear that landlords are under no obligation to permit medically prescribed marijuana under federal fair housing law. But what about under state laws?

In California, the Unruh Civil Rights Act prohibits discrimination by any business in the state, including housing and public accommodations. The Act states that “all persons within the jurisdiction of this state are free and equal; that no matter what their sex, race, color,

religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation, are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.”

It is possible that California, as well as other states, would consider it a violation of state fair housing law not to consider a reasonable accommodation request for the use of medical marijuana.

HUD has stated that applicants to HUD-assisted properties that use marijuana for any reason must be rejected. But the Department has taken a softer stance on current residents, essentially leaving it up to owners and public housing authorities to figure out how to handle the situation.

Recommended Policies

Following are some recommendations for owners and managers of LIHTC and other affordable rental properties:

  • Carefully research the specifics of marijuana-related laws in your state to ensure you comply with state requirements;
  • Examine loan and regulatory documents for any language relating to on-site drug use;
  • Make sure your lease complies with state law and any federal requirements;
  • If an applicant or tenant requests permission to smoke medically prescribed marijuana, consider asking them if it is possible for them to take it in a different form, such as edibles or tinctures;
  • Review any smoke-free policies you may have to determine the impact on medical marijuana users (Note: Owners and managers should be aware that since requests for a reasonable accommodation may be denied if the accommodation would create an undue financial and administrative burden or fundamentally alter the way a property operates, properties that do not permit smoking probably do not have to approve the smoking of medically prescribed marijuana. Permitting the latter would almost certainly be considered a fundamental alteration in the way the property operates.
  • Refusal to permit the smoking of medically prescribed marijuana may be much more difficult in properties that permit smoking.); and,
  • Do not ask potential tenants if they are medical marijuana users. This may violate privacy rights.

The preceding recommendations apply only to states where the use of medically prescribed marijuana is permitted under state law; the use of marijuana in other states – and for any other purpose – does not have to be permitted.

A. J. Johnson is President of A. J. Johnson Consulting Services, Inc., a Williamsburg, Va.-based full service real estate consulting firm specializing in due diligence and asset management issues, with an emphasis on low-income housing tax credit properties. He may be reached at 757-259-9920, [email protected].