British Columbia

How do you negotiate a divorce when the 'family business' is illegal pot?

For more than 20 years, the Smiths kept their money in safe deposit boxes, plastic bags and buried underground. Some of it was tied up in real estate holdings in Canada, the U.S. and Mexico.

B.C. judgment details 'inferential, thin and often contradictory' evidence in bitter breakup

The Smiths ran a lucrative illegal cannabis business for more than 20 years. (Associated Press)

For more than 20 years, the Smiths kept their money in safe deposit boxes, plastic bags and buried underground. Some of it was tied up in real estate holdings in Canada, the U.S. and Mexico.

All their dealings were conducted in cash, with no proper records, to protect the successful "family business" — the illegal cultivation and sale of cannabis across western North America, according to a recent B.C. Supreme Court judgment.

That made things difficult when the Smiths decided to divorce and divide their assets after 30 years of marriage.

"Because these were illegal operations, the parties had very limited evidence to assist me in understanding how much money was brought into the family," Justice Wendy Baker wrote in her Friday judgment, which does not include the Smiths' first names.

"It was clear that the family enjoyed a comfortable lifestyle on this income. They travelled in the United States and abroad. They financed 50 per cent of their daughters' university educations. They took winters off and generally lived well."

Life on the move

Those two daughters went on to legitimate careers in teaching and the law, according to the judgment.

But the girls' early years were marked by frequent moves, which saw the family buying and selling homes in B.C., Alberta, California and La Paz, Mexico.

Along the way, the Smiths ran progressively larger marijuana grow operations, starting with a small home-based operation in Coquitlam in 1987 and building to a large California enterprise two decades later.

Most recently, they obtained licences in 2013 to grow medical marijuana in Grand Forks, but Mrs. Smith testified that this was just a cover for their illegal business.

The Smiths used a medical marijuana licence as a cover for their illegal operations in Grand Forks. (Darryl Dyck/Canadian Press)

In the end, their real estate deals were the only traceable piece of the Smiths' financial picture.

"The evidence from the parties as to the income derived from the marijuana sales was oral, inferential, thin and often contradictory. Credibility of both parties is in issue in this litigation," Baker wrote.

'The money did not exist'

She pointed to one particularly contentious incident, which happened on Aug. 23, 2013 — the night Mr. Smith walked out of the family home for good.

His then-wife shot a video of him leaving, and it shows Mr. Smith carrying a clear plastic bag filled with U.S. cash, according to the judgment.

The lingering question is how much money was in that bag.

"On the video, Mr. Smith says something to the effect that the money did not exist. Each party urged me to take something different from this statement," Baker wrote.

Mrs. Smith told the court there was anything from $60,000 to $80,000 in the bag — and that it was all she had to live on. She argued her ex was taunting her by saying no one could trace it.

Mr. Smith, on the other hand, testified it was only about $20,000, and said that he grabbed it because Mrs. Smith had at least that much money set aside in a safe deposit box. He claimed he meant the money in the safe "did not exist."

"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," Baker wrote.

Mr. Smith took anywhere between $20,000 and $80,000 in U.S. cash on the night he left. (Uncredited)

In the end, the judge drew up a plan for the couple to divide their interests in the remaining properties and the proceeds of recent property sales.

She also ordered Mr. Smith to pay spousal support in a lump sum of $134,694, writing that Mrs. Smith had serious health problems and few job skills after decades of children.

And, after such a bitter break-up, Baker decreed, "Neither party shall have contact or communication with the other in any manner, except through legal counsel now or at any time in the future."

About the Author

Bethany Lindsay

Journalist

Bethany Lindsay is a B.C. journalist with a focus on the courts, health, science and social justice issues. Questions or news tips? Get in touch at bethany.lindsay@cbc.ca or on Twitter through @bethanylindsay.

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