Marijuana is currently enjoying a transition in its status in the eyes of the law. Federally, marijuana is an illegal, controlled substance. However, some states are eroding the absolute nature of marijuana’s illegality, carving out exceptions for medical need, and recently, even for recreational use. Homeowners’ and condominium associations must stay abreast of these changes in the law (and in social mores) regarding marijuana, so they can proactively and efficiently run their planned communities. This blog addresses: the current status of marijuana in Hawaii; the reasoning behind the upcoming (and projected) legal transition towards marijuana legalization; and how community associations’ boards of directors can prepare, in advance, for the new role marijuana will play in residential planned communities.
The Current Status Of Marijuana’s Legality In Hawaii
Since 2000, Hawaii permits patients, with specifically defined medical conditions and doctor approval, to grow and possess small amounts of marijuana. See Hawaii Revised Statutes §§ 329-121 to 329-128, inclusive. These conditions for which medical marijuana is permissible include cancer, glaucoma, HIV/AIDS, severe pain, and, in the past two years, post-traumatic stress disorder (PTSD). Individuals with these conditions must apply to the Hawaii Department of Health and receive a state-issued identification card allowing them to use marijuana for medical purposes. There are approximately 14,000 Hawaii patients who have registered and have been approved to use medical marijuana. Recreational use, although rampant in Hawaii, remains illegal.
The Shift Toward Complete Legalization of Marijuana in Hawaii
Yet, the law is shifting toward allowing recreational use of marijuana, as in Colorado and Washington; partially as it becomes more socially acceptable to use this substance, and mostly because the financial windfall is projected to be a massive boost to Hawaii’s economy.
Legal marijuana production is America’s fastest growing economy, valued at roughly $3 billion in 2014; and has blossomed in the past year due to the legalization of recreational marijuana use in Colorado and Washington, and the opening of dispensaries in Oregon. This figure also does not take into account illegal production of marijuana, which is valuated at almost $36 billion a year and is the highest-value crop in the United States (more than corn and hay combined). In Hawaii alone, the total marijuana production (including illegal growing) was reported by the Drug Enforcement Agency as worth almost $4 billion in 2006, and has risen exponentially since then.
And the State of Hawaii wants a piece of that action. When Colorado legalized marijuana, it saw $7 million in state tax revenue during the first three (3) months of sales. Washington’s revenue was higher, closer to $10 million. And, Oregon’s tax haul was the highest: whereas Colorado dispensaries sold well over $20 million of marijuana in its first three months of operation; Oregon dispensaries sold that same amount in its first month of operation, alone. And all of those sales are regulated and taxed by the states.
Pacific Business News estimates that the potential for Hawaii sales – once the State-approved dispensaries open in 2016 – will be upwards of $60 million per year. Given the figures from Oregon, however, that number is likely a significantly conservative estimate. University of Hawaii at Manoa studies project that legalizing marijuana would save Hawaii $9 million a year in costs; and generate well over $12 million a year in new taxes; a figure which could, generously, reach $100 million (or more) in tax revenue. And that number does not take into account the potential (likely) boost to the economy (and taxes levied thereon) from increased tourism, influx in investment in farming and dispensaries, and money collected from licenses and fees. For these reasons, the Hawaii legislature is becoming increasingly open to completely legalizing marijuana growth and use within the state.
The Role of Associations In Regulating Marijuana
Given the changing landscape in Hawaii regarding marijuana; condominium and homeowners’ associations, by and through their boards of directors, should proactively take reasonable steps to address these issues, before they give rise to problems and disputes. This is especially true in light of the fact that the Department of Health has not yet promulgated and released its administrative rules governing marijuana.
The major issue regarding marijuana which plagues planned communities is smoking. There are two main ways to regulate this activity.
First, the association has the authority to ban any and all illegal activities. Marijuana is a controlled substance and is considered an illegal drug by the federal government. This means that boards of directors could enforce association rules and restrictions forbidding any and all illegal activity, including the use marijuana. However, some states (and, for the reasons set forth above, potentially Hawaii soon) have not only de-criminalized marijuana, they have made its medical and recreational use permissible. Should this occur, then it would be a question for the Hawaii courts to determine, whether federal or state law prevails and whether marijuana use can be banned from an association’s property. Given Hawaii’s relatively permissive nature with marijuana, as well as the uncertainty of the law and the expenses inherent in litigation; this may not be a test case that an association wants to tackle.
Second, (a more recommended route for a board of directors), the association can regulate marijuana use through its power to control nuisances, as well as the conduct of owners which constitute nuisances. To that end, many planned communities ban smoking outright, whether tobacco or marijuana, anywhere on the property, both inside individual units as well as in common areas; alleging that the threat of secondhand smoke constitutes a nuisance. See Suave v. Heritage Hills, Civil No. 1256 (Colo. Dist. Ct. Nov. 7, 2006) (approving a condominium association’s total ban on smoking because secondhand smoke constitutes a nuisance and a violation of the governing documents). As a result, associations can collect assessments and fees for nuisance (smoking) violations. This would apply to smoking marijuana, as well.
A likely issue that will arise for these non-smoking communities is that marijuana, unlike tobacco, is prescribed by doctors for medical purposes. Consequently, some unit owners may request “reasonable accommodations” under the Fair Housing Act to let them smoke marijuana, even though the association does not permit smoking. A “reasonable accommodation” is a change or exception to a community association’s rules or governing documents that is necessary so that a disabled individual has the same opportunity as others to use and enjoy their home and the common elements appurtenant thereto. See Joint Statement of the Department of Housing and Urban Development and the Department of Justice: Reasonable Accommodations Under the Fair Housing Act (May 17, 2004) (interpreting the Fair Housing Act, as codified at 42 USC §§ 3601-3619). In such a scenario, boards of directors are permitted to request documentation of the need for an accommodation, including, but not limited to, a signed note from a doctor, on letterhead, documenting the medical need for marijuana, as well as the state-issued card verifying the owner’s right to use marijuana for medical purposes. Should this documentation not be provided, or the material submitted be inadequate, the board of directors is permitted to request additional documentation. Until satisfactory evidence is provided that the requester has a medical need for marijuana, its possession and use can be considered a nuisance activity and regulated and fined accordingly.
It is important to note that even providing valid documentation does not give a unit owner an absolute right to smoke marijuana within the association premises. The board of directors is authorized by the Fair Housing Act to offer accommodations that are deemed “reasonable.” This could include having the medical marijuana user ingest in a non-smoking form (such as pills, liquid, or baking). If smoking is the only medically necessary way for the patient to consume marijuana; then the association could request that the unit owner install filters within the unit, as well as seal all penetrations and possible points of seepage in walls, ceilings, doors, windows, and floors so as not to spread the odor throughout the property. These accommodations would be considered reasonable under the circumstances and still allow the patient to ingest marijuana as treatment for their medical need.
For communities that permit tobacco smoking within the association’s premises, regulating marijuana will be significantly more challenging, especially in light of the changing social and legal mores, as discussed above. If these associations wish to become non-smoking locations, a bylaw amendment is recommended – as opposed to the creation of a house rule or regulation – as it is more likely to survive a challenge from a unit owner. Otherwise, the community association will likely face an uphill battle in banning smoking of marijuana on its property.
It is strongly advised that associations’ boards of directors act proactively, as the laws in Hawaii begin to change to be more permissive toward marijuana use, by:
– Deciding whether to ban smoking outright on association property; and if so, pass a bylaw amendment;
– Establishing a written policy for handling reasonable accommodation requests under the Fair Housing Act, including what documentation will be required and what accommodations will be permitted; and
– Be flexible and fair in managing such requests; balancing both the individual with the disability’s needs with the interests of the planned community as a whole.