Hi Jessica, if they ban smoking, I believe it will be legal and life for the smoking tenant will quickly become unbearable.

I would mention to Tenant B that I was visiting Tenant A and smelled what seemed like marijuana smoke coming from their side and remind them there is no smoking permitted inside the house.

Hi, my name is Mike Smoke, and I'm an aspiring real estate investor focusing on multifamily and Section 8 properties in the U.S. as the barrier to entry is much much lower in terms of price compared to Canada and Funding options. 

Plus very few of these groups smoke or drink so that's other problems eliminated.  

People that have experienced the smell coming through the walls via the interior voids will tell you it is quite potent, persistent and annoying.

City recently did a building inspection and we noticed the tenant is smoking in the unit (cigarettes and marijuana), food waste everywhere leading to building pest issues, and there are 5 people living there now (3 adults and 2 kids).

If you got a report that someone was smoking cigarettes or cigars outside only, per the rules, would you post the same question?

Depending on the severity of smoke damage and structural issues, it could be a huge challenge for first time flip.

Often I can smell scents from the lower unit that aren't pleasant (cooking, smoking, etc).

There's currently a tenant in the house (who I presume caused the smoke damage), but the seller promises that this tenant will be gone before closing.