Blog Division of property

What To Do With The Family Business When The Family Business Is Marijuana

Part of going through a Divorce or separation is determining how family assets are divided. That may be a relatively easy for some couples, but of course, it can be difficult for others, such as families who own a businesses or have larger estates. A recent case from the Supreme Court of British Columbia highlights a wrinkle that complicated things even further: The family business was growing marijuana.

A long running, and illegal business

The couple began living together in 1982 and got married one year later. They separated in 2013, after living together for 31 years and being married for 30. For over 20 years leading up to their separation, the couple was engaged in a very successful family business of growing and selling marijuana in British Columbia, Alberta, and California.

Being an illegal operation, the couple did not keep business records of their work. They both testified before the court, but their testimony raised questions of credibility.

The couple purchased and sold a number of properties over the years. Their homes in British Columbia and Alberta served as a place to live as well as a place to grow marijuana. They had an even larger growing operation at a California property which they bought in the 1990s and sold in 2006. In addition to their homes in the United States and Canada, the couple also had property in Mexico.

In addition to growing illegal marijuana, the couple also obtained a license to grow medical marijuana in BC in 2013. However, they testified that the medical marijuana license served as a front for their illegal grow-op.

Significant amounts of cash

The nature of the couples’ business meant much of their money came in the form of cash. Over the years they kept cash in their homes, in safety deposit boxes, and even buried underground. This complicated things when they began to work through their divorce.

The court highlighted one incident involving cash which serves as an example of the difficulties of trying to determine what the couple’s assets were. There was a video recording taken on the night the husband left the family home. In it, he is seen taking a clear plastic bag filled with US dollars out of the bathroom. It was not clear in the video how much cash was in the bag. The wife testified the bag contained $60,000-$80,000 which the husband had given to her in order to run the home. The husband testified the bag contained only $20,000, and that the wife had an equal or greater amount of money in a safety deposit box. The husband was heard in the video saying something to the effect of the money did not exist. The wife said this meant it was untraceable and she could not do anything to prevent him from taking it. The husband said he was repeating the wife’s comments, and that the money that didn’t exist was the money contained in the safety deposit box.

The judge stated that neither party’s evidence was enough to make an accurate determination of how much money was in the bag, writing “Other than the inconsistent statements of these witnesses, no other evidence was presented to tend to confirm either version of events. All I can conclude is that there was some money taken by Mr. Smith.”

Sorting things out

Of course, the money in the bag was just one piece of the puzzle. The judge remarked, “Other contrary evidence was given about the amount of money that was earned from the grow operations, to what extent sums of money were buried to avoid detection, and other details of the various marijuana grow operations. Without confirmatory evidence, there is very little I can draw from the evidence presented by these witnesses regarding their ‘family business’.”

Ultimately, the court was unable to determine how much cash the couple had. They were ordered to divide their interests in their properties. The husband had worked as a metalworker in Alberta in the years following their separation, earning an average of $90,000 per year. The wife, who had not worked outside of the home and family business, had health problems and had been out of the workforce for a number of years. As a result, the court ordered the husband to pay spousal support in the form of a lump sum of $134,694.

Working through a separation is difficult, even for couples not involved in illegal activities. The friendly, compassionate and professional family law team at Borden Family Lawyers help our clients navigate through all areas of family law. With family law serving as our exclusive are of practice, we are able to apply our years of experience to your unique needs and issues. Please call us at 905-576-6090 or reach us online to see how we can help you today. Please ask about our flat fees.