£2.5 million Cannabis Production Drug Valuation Successfully Challenged in POCA Proceedings

Sep 25, 2017

Earlier this year we received instructions in a cannabis production case that had concluded and was now subject to proceedings under the Proceeds of Crime Act.  On the face of it this was a fairly straightforward case. Police officers had executed a search warrant at a rural location and discovered a number of cannabis plants under development.  The outcome of the criminal proceedings perhaps offer some indication of the scale and success of the facility as a suspended sentence was imposed on the grower who pleaded guilty. 

However when the Section 16 Statement was served the Financial Investigator, made an assessment of the value of the cannabis under development which included an assessment of the existing crop and previous crops.  In a detailed assessment of the facilities the benefit figure attributed to the drugs was suggested to be £2.5 million.  It was perhaps not surprising that we were asked to look at the suggested yields and values of the existing crop and also the accuracy of the assumptions made in respect of the previous crops. 

The imposition of a suspended prison sentence perhaps offers some indication as to how the ‘scale’ and success of this cannabis cultivation facility was initially assessed.  Our review of the evidence offered an alternative valuation which was strongly at odds with that applied by the Financial Investigator.  At a pre-trial review the Financial Investigator and the police expert revised their valuations from £2.5 million, to £144,000.  It was suggested that this ‘concession’ was so significant that it should be accepted as a generous offer. 

The evidence, even with the revised valuation was inaccurate and was not accepted.  The case was recently concluded in Crown Court when the Crown revised the value attributed to the cannabis to circa £66k. 

It was clearly a significant reduction from the initial assessment of £2.5 million and whilst such a grossly inflated figure draws immediate attention we wonder how many such cases where the figure, on paper at least appears to be reasonable go unchallenged?  For example in this case if the initial valuation applied had been £144,000 then would it have been accepted?  On the face of it such a valuation may not have been considered excessive.  It was only when we reviewed the papers that we highlighted a significant flaw in the way the plants had been assessed, introducing an element of double-counting that the flawed approach was highlighted.

 The Proceeds of Crime Act was rightly intended to be draconian.  It was not however intended to be punitive and thus we continue to challenge valuations that are inflated, inaccurate or flawed.