A hydroponic grow box called Grobo may be the solution for real estate professionals seeking to help select clients grow cannabis safely in their homes once the practice becomes legal in much of Canada, says financial consultant James Zaza.

“The Grobo is going to help (Realtors) get in the door and get leads,” he says. Today’s real estate professionals “need to be more than just somebody who sells a house,” and the Grobo helps them achieve that goal, he adds.

Zaza is an investor in Grobo, a Waterloo, Ont. startup that has developed an indoor growing system that is fully automated from a smart phone app. It’s odourless and care-free and eliminates the problems posed by mini grow-ops in homes, he says.

Cannabis grown indoors requires significant heat and moisture, which can cause water and mould damage to homes, harm their structural integrity and pose fire threats.

The real estate industry has expressed concerns that cannabis grown improperly in homes could cause property values to plummet. However, Zaza says the Grobo provides homeowners with a safe way to grow cannabis indoors.

Zaza, president of Toronto-based Zaza Financial Group, will be demonstrating Grobo at the Ontario Real Estate Association conference in late February. He will also be introducing a scheme in which Realtors can sponsor the devices and provide them to clients or potential clients who have prescriptions for medical marijuana and would like to grow their own cannabis.

Grobo was initially created in 2014 to grow fruit, herbs and vegetables indoors during winter, but co-founders and fellow University of Waterloo mechanical engineering graduates Bjorn Dawson and Chris Thiele soon discovered it could help marijuana patients grow cannabis plants at home.

The cannabis cultivation unit is sometimes described as a “Keurig for plants.” Users need only fill its reservoirs with water and nutrients, drop seeds into its base and then let a connected app control the growing process. The Grobo uses sensors to monitor the condition of the plant, automatically adjusting its watering schedule, and then lets you know when it’s ready to harvest. LEDs inside give the equivalent of 18 hours of sunshine every day and electricity costs are low.

“It’s really a great concept because without even touching the plant, you can watch it grow and add nutrients in the water and light remotely,” says Zaza. “There’s no humidity, there’s no leakage, there’s no drain of electricity. LED lighting provides efficient, concentrated power. It’s safe, it’s clean, it’s childproof.”

At the OREA conference, Zaza plans to sell Grobos at full price or lease them to Realtors who have joined his recently launched insured personal pension and health benefits plan for self-employed real estate professionals.

Under the lease plan, Realtors can sponsor the Grobo and provide it for free to clients with prescriptions for medical cannabis. Panels on the Grobo unit will have space for advertising displays by Realtors.

Clients who receive a Grobo free of charge can also get free cannabis seeds if they agree to give back their surplus cannabis production to Zaza, which he in turn hopes to donate for free as medical marijuana to children with epilepsy or cancer. (The Grobo can produce up to 16 pounds of cannabis a year in four growth cycles. Medical marijuana users would generally require less than one pound a year.)

“A lot of people are going to be keen to grow clean, quality-controlled, reasonably priced cannabis in their own home,” Zaza says.

Although the federal government’s proposed law to legalize non-medical cannabis in July 2018 permits adults to grow up to four marijuana plants at home, it is up to each province to outline their plans for regulating recreational marijuana. Not all provinces are onboard with growing cannabis in homes. For example, Quebec has announced no one will be allowed to grow cannabis in homes for personal use and Manitobans without a medical license will be forbidden from growing plants at home.

Zaza says Realtors can host the marijuana equivalent of Tupperware parties – lead-generating “home Grobo parties” that will educate potential clients on the medical values of cannabis, its proper usage and how to grow it safely in the home.

Agents “will be all over” the sponsorship idea. “It’s a great way to meet people, lets them know you care about their families and their health.” It also allows real estate professionals to “do something unique and exclusive for the community that has never been done before.”

Zaza met Dawson of Grobo a few years ago and decided to invest in the company. (He would not divulge the amount.) He also has investments in his portfolio in several Canadian cannabis companies that represent most of the country’s production.

More than 600 Grobo units have been sold in pre-production at a cost of $1,995 to buyers in Canada, U.S. and Europe. The units, which are five-feet high by 2-1/2-feet deep by 2-1/2-feet wide, should begin shipping in March. Once the company is in full production, about 25 to 30 Grobo units should be made weekly in Waterloo, Zaza says.

Grobo is not alone in the market. In October, marijuana company Aurora Cannabis paid $3.85-million to buy B.C. Northern Lights Enterprises, a Vancouver-based company that manufactures refrigerator-sized grow boxes. The miniature nurseries are loaded up with high-powered lights, ventilation systems and hydroponics equipment.

Zaza plans to roll out his Grobo plan in Ontario before expanding it to other provinces.

He is a strong proponent of the potential health benefits of cannabis. His website contains a “Cannabis Community College” link with information on the drug.

He says cannabis has saved his wife and daughter from opioid addiction. “My purpose is to try to eliminate opiates. I’m trying to get them off the face of the earth.”

1. If your deposit was not enough to cover your entire down payment you will be expected to provide the rest of the down payment at move-in time.
2. Real Estate commissions are paid by the seller, so you have no cost for this.
3. New properties have a sales tax called GST; this should have been added to the price before the mortgage was obtained so that no funds are needed for this tax at the time of possession if you have a mortgage. When you arrange your mortgage loan, discuss having the GST included in the mortgage amount with your lender.
   For properties under $350,000 the net GST rate is 3.2% for homeowners. Investors who rent out their suite pay 5% GST when they purchase and in most cases get a 1.8% GST rebate when they find a tenant who makes the suite their primary residence.
4. If you have less than 20% down you will have mortgage insurance (about 2-3% of your mortgage). This premium will be added on top of your mortgage once at the beginning, so you do not have to pay this premium in cash at possession time.
5. In BC there is a sales tax called the Property Transfer Tax (PTT). This tax does not apply to NEW residences under $750,000 when the property is used as a primary residence by a Canadian citizen or permanent resident. The tax does apply to properties over $750,000, all used properties, bare land and commercial/industrial properties. The rate of this tax is 1% on the first $200,000 and 2% on the balance. On a $400,000 used condo this tax would be $6,000, but because the Yorkson offering is new condos, the tax will not apply.
6. Your bank may have an appraisal fee to be paid when you buy, but most lenders will waive this fee. If they don’t it is often about $300.
7. Your lawyer will charge you legal fees to handle your share of legal work for the purchase, these fees are often about $900 and must be paid when you take possession. There may be property tax adjustment of a few hundred dollars when you move in, depending on the time of year that you take possession. [Sometimes your bank will pay part of these closing fees as a gift to you for using them for your mortgage].
8. Sometimes utilities will charge you a fee of $50 to $70 to hook up power for the first time.
9. The fire/water/flood/earthquake insurance your mortgage company requires is already provided by your strata corporation.  You do not need to purchase more insurance if you don’t want to.  The included insurance does not include your contents or personal liability. Some buyers purchase additional contents and personal liability insurance.
10. Finally, there is often the added cost of a moving van to move your possessions in.

Rentals Allowed by a "Form J: the Rental Disclosure Statement"

A "Form J: the Rental Disclosure Statement" also determines whether strata lot owners can rent their lots despite rental restriction bylaws. The Form J:

• describes the strata lots that may be rented and
• sets out the date during which the rentals may occur

Under the Strata Property Act, Owner Developers must provide prospective purchasers with a Form J that has been filed with the Superintendent of Real Estate, if the Owner Developer intends to rent or preserve the right to rent any of the residential strata lots.

Rental disclosure statements are only filed by the Owner Developer and are completed individually for each strata lot.

Strata lot owners may have different rights to rent their lots depending on when the Form J was filed.

 For Form Js filed on or before December 31, 2009, a lot that has been designated as a rental lot by the Owner Developer on a Form J remains eligible as a rental lot – regardless of rental restriction bylaws – until either:

• the lot is sold or transferred by the first purchaser or
• the date set out on the Form J expires (whichever occurs first)

For the Owner Developer or the first purchaser from the Owner Developer, the effect of the Form J is to preserve the right to rent the strata lot for the length of time set out in the Form J, despite any subsequent rental restriction bylaws.

However, a purchaser who buys the strata lot from someone other than the Owner Developer does not have a right to rent the strata lot. For the new owners, a strata lot may only be rented if there is no rental restriction bylaw or the owner is permitted to rent despite a rental restriction bylaw because of:

• the family member exception
• a determination of hardship by the strata council
• the provision that delays the application of a rental restriction bylaw. The Strata Property Act gives owners who are renting time to comply with a new rental restriction bylaw

For  “Form J: Rental Disclosure Statements” filed on or after January 1, 2010  there are different rules.  The owner-developer can now designate that a strata lot can be rented to a date specified on the Form J.

For these strata lots, a strata lot eligible as a rental remains designated as eligible until the date the rental period expires. The strata lot is not affected by any subsequent rental restriction bylaws until the rental period date on the Form J expires.

This means the right to rent a strata lot can continue from one purchaser to the next as long as the rental period on the Form J remains unexpired. This provision only applies to "Form J: Rental Disclosure Statements" filed on or after January 1, 2010.