Tenants have proper licensing from the state. It is a federal crime, though not a high priority. We want to hire an attorney practicing law in Nevada - where our mom now lives-rather than Calif. where the house is located. We feel there are too many personal and professional relationships i.e. friends/associates within the professional/business areas of this relatively small community. We feel the clock is ticking in terms of legalities and property/personal liability insurances now that Mom has knowledge of this situation.
Question, what are the lease terms for the tenants? One year lease? Three year lease? Month to month? If under one year or going month to month... your Mom, as the landlord, can decide not to renew the lease.
How is the Lease written? Is there a paragraph saying that the tenant needs to obtain their own household insurance? Did the tenant obtain written permission for any changes made to the property, such as installing sprinklers lines outdoors?
Bet your Mom doesn't want to make waves, specially if you all found out that there is no license to grow marijuana, and/or if you hear from neighbors that there is a lot of traffic at the house which may [or may not] indicate the tenant could [or could not] be selling marijuana to others. If the answers are yes, consult an attorney that specializes in landlord/tenants on what to do next.
Keep mom out of it. Mom should hire a property manager to handle this for her. She doesn't need to be in a middle of this kind of problem.
She should say nothing to her insurance company.
Here's an idea, have Mom say she is putting the house on the market For Sale starting the first of November. No tenant, who is growing what could be an illegal substance, would want people walking through the house nosing around.