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Legalized Recreational Use of Marijuana May Soon Become a Reality for New York State – But Not Its Title Underwriters

marijuana plant

I’ll admit it – I may be among New York State’s nerdiest lawyers. You see, despite my advanced age, I’ve never used marijuana! Hey, it’s illegal, right? And, if Gov. Cuomo is correct, it’s a gateway drug, too, and I sure don’t want to become a drug addict!

Actually though, now, the Governor may be reversing course a little, and it seems New York State may, sometime during this legislative session, legalize recreational marijuana use. Just Google “NY Marijuana” and you’ll have access to a plethora of information, explaining the political pressures and rational arguments behind the shift.

Personally, I can’t wait! I’m not an advocate one way or the other; I just want to know what all the buzz is about! OK, to be completely honest, I guess I’m uncertain about whether, if NYS legalizes it, I will try it. You see, according to the title underwriters we work with here at Vanguard, we have to pay attention, not just to New York law, but Federal law, too. No surprise there, if truth be known. On the other hand, if a tree falls . . . .

I had occasion recently to underwrite a multi-million-dollar title in central New York, but a major tenant in the property was a proposed Cannabis-related enterprise. I thought: “OK, the lease says all New York and federal laws, rules, and regulations will be complied with,” so what’s the harm? After learning that a sister company of one of our Underwriters declined to insure, I decided to check with our Underwriters. Wow, was I wrong!

Without going into too much detail, it turns out that senior underwriting counsel for our underwriters are very concerned – not so much about the potential direct violation of Federal law – but about “aiding and abetting” a federal criminal activity, by assisting a Lender who loans money to the landlord who supports engagement in a federal criminal activity. So, they all said NO! [emphasis NOT added]. I joked with the client that “Maybe, Magic Dragon National Title Insurance Company would insure”. (The client didn’t laugh, either).

The take-away, for now, is that even if and when New York State legalizes recreational marijuana use, title companies likely will not insure real property associated with promoting or facilitating such use, at least unless and until the federal government’s position changes, or until we have legal precedent fully supporting the change.

The other take-away is, even old dogs can learn!

The author welcomes comments and discussion.

To provide comments, Email the author: gilbert.hoffman@vgrti.com.

The author reserves the right to edit or reject material provided.

The above material expresses an author’s opinion, and does not necessarily represent the position of Vanguard Research & Title Services, Inc. or its underwriters.
Vanguard Research & Title Services, Inc.
Vanguard Research & Title Services, Inc. is a full-service research and title insurance provider offering comprehensive real property research, title insurance products, and services throughout the State of New York. If there is a service you require that we do not currently provide, please contact us about building a custom solution for you.
CORPORATE OFFICES:
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OFFICE LOCATIONS
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POLICY ISSUING AGENT FOR
Fidelity National Title Insurance Company
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Licensed New York State Title Insurance Agent: TLA-1361055
Vanguard Research & Title Services, Inc. is a full-service research and title insurance provider offering comprehensive real property research, title insurance products, and services throughout the State of New York.
CORPORATE OFFICES:
499 South Warren Street, Syracuse, New York 13202
315-422-6031 | 800-294-3740
OFFICE LOCATIONS
Onondaga County | Oswego County
POLICY ISSUING AGENT FOR
Fidelity National Title Insurance Company
Old Republic National Title Insurance Company
WFG National Title Insurance Company
Licensed New York State Title Insurance Agent: TLA-1361055
© 2012- Vanguard Research & Title Services, Inc.
All rights reserved.
Privacy Policy | Rates & Fees | Blog | Newsletter | Contact Us

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