Cannabis in Canada
When the Crown questioned Scott Wilkins they asserted that his knowledge of the MMAR gardens, and their associated risks, were from an insurance perspective.
“Yes, financial,” Scott replied.
He was known through word-of-mouth. But he told the court that a majority of his referrals were colleagues in the industry sending him clients. Why? Because they don't know what to do with MMAR clients. Because of cannabis stigma and a general ignorance around cannabis cultivation, most insurance companies wouldn't insure an MMAR garden. Scott Wilkins' brokerage was, as far he knew, the only business doing this. Three hundred clients and not a single claim.
Representing the Crown was a young lawyer full of spunk. The questions he asked bordered on absurd. It has been the trend of this case for each side to try and discredit the other. Matthew Jackson went after Len Garis' methodological approach, just as the Crown went after Tim Moen on his susceptibility to confirmation bias. For ten days each side has been saying, 'My Friend is biased,' in one form or another. Usually while cross-examining a witness and asking, 'that's pure conjecture, isn't it?' They tried this on Scott. The young lawyer was full of piss and vinegar. But there was nothing to catch Scott on.
Scott's brokerage wants to know if a site has been inspected by an electrician. They'll demand it. “Maybe a dozen,” said Scott did not have an electrician go through, so a professional electrician was called in and things were done.
“Costs at the expense of the MMAR owner?” the Crown wants to know.
Of course. It's insurance. Scott reminds the kid that important electrical work has to be done by a professional. Whether it's a medical cannabis garden or an addition to a house or garage. Throughout the questioning, Scott called the MMAR sites gardens.
Is there a security expert? No, Scott just requires them to list the MMAR requirements they've fulfilled and anything above and beyond. The Crown is astonished. You're leaving it to them? You don't require 24-hour surveillance? You don't require a specific grade of lock?
Scott picked up where the kid was going. His insurance brokerage does not require regulations like the MMPR. He also works with LPs and that regulatory system is “a whole different world.”
The Crown asked him if the insurance company has a plumber go to the MMAR site. Scott looked confounded. No, of course not.
“So no reports from plumbers?”
Scott assured the young lawyer that the insurance company has its own process to determine whether a residential home is messing with the plumbing system of the community.
Well then surely, went the Crown's logic, an expert must go through the MMAR site to ensure there was no toxic mold. But Scott wouldn't have that report, would he? No reports that homes were free of mold or other toxicities?
Scott reminded the court that, “these are places where families live,” so they generally don't want that. Many of his MMAR clients voluntarily went to the local authorities. They reported good reception. These reports were not a requirement for his business.
So then, went the Crown, you have no reports on health and safety examples? Nothing to show that everything is being used in a safe way?
Scott almost looked startled. Did this kid even know what an insurance company was? Scott explained that those reports were unnecessary for what he did. And just like with the LPs, he didn't go around inspecting the structural integrity of the building, or in this case, a home or rural property (don't get Mr. Conroy started on the definition of “dwelling”). In this case, LMG Insurance Brokers just asked common-sense questions. Were the policyholders following all the laws and regulations associated with their gardens?
And on and on it went. No, no, no, no. Reports on testing cannabis? The look of astonishment on Scott's face had reached a climax. There could be no more of this. “None of this stuff is needed for insurance purposes,” Scott reminded the young lawyer. He even looked to Justice Phelan at one moment to remind everyone that he was here to assist the court with his knowledge of insurance. Justice Phelan agreed. When the young lawyer was naming off all the things Scott wasn't (an electrician, a botanist, a firefighter), Justice Phelan piped up,
“He's not a hockey player either,” drawing laughs from everyone present.
So the gears shifted and the Crown asked if insuring a house with an MMAR site was more expensive than a regular house.
“Oh yeah absolutely,” Scott told the truth. The deductibles were higher though, by an average of $1500.
In their questioning, Scott had to clarify that he counts locations, not licenses. Some licenses were together on one property. But even then, the Crown reminded him, if all licenses were on 4000 properties, that 300 clients out of 4000 wasn't a majority. Scott agreed. But he looks at time. Since the loss ratios come out over time (how he makes money), he figured that this 300 sampling is likely the case for the majority. So his brokerage has a business plan to sell them all insurance. He wants every single cannabis garden in this country insured by his brokerage. In pursuit of profit, he's really ensuring everyone that if these gardens go up in flames and take the country with them – he’s got his neck on the line and signature on the contract.
This was the crux of Scott's methodology. He didn't have the reports or statistics that each side had been presenting and scrutinizing. Scott's knowledge came from profit. If people weren't happy with his services, he wouldn't make money. If what the government claimed were true, then it would be extremely unprofitable to insure gardens. But it's not unprofitable, it's merely more expensive.
Gardens are considered a higher risk probably because of insufficient knowledge. Scott mentioned to the court how a local by-law threatened medical cannabis gardens, so he set up a tour for the councilmen and women to take through an MMAR site. They changed their minds on the by-law.
Scott Wilkins, an entrepreneur, had identified a niche market. Patients with gardens or designated growers paid an annual premium in exchange for certainty. Scott accepted the premium in exchange for a conditional payout, if it were to occur. It's the sharing of risk. It's a win-win. But more importantly, it's a signal for social scientists. A signal that most social scientists choose to ignore.
Len Garis collected data to fit his theory. Tim Moen criticized this approach but then did something similar for his report. Scott, on the other hand, only collected the relevant data. How did he know? He didn't. He was a witness with a financial perspective. And anyone seriously looking at this case has to come to the conclusion that the transition to the MMPR without home gardening is almost entirely about money.
But the fact that people voluntarily pay Scott, indicated that his service was, and still is demanded. The only relevant data was the profitability of LMG Insurance Brokers. Not being insurable would indicate that perhaps these gardens were a threat to public health and safety, since no one would be willing to share the risk. But Scott planned on expanding his business. And there's no reason another insurance broker couldn't get into the field to compete with Scott. As the stigma around cannabis fades, more brokers will realize how safe, effective and simple some of these medical cannabis gardens really are. Why wouldn't one want to insure them?
From the Crown's point of view, they might have debunked Scott. No reports, no statistics. He's a personal production holder himself, so he's biased. But that part wasn't disclosed voluntarily. The Crown went and accessed his medical files because according to the laws, if the government is being sued it can pull up any dirt it wants on you and your witnesses. But although they tried to discredit Scott, the Crown failed utterly and completely to see the larger picture. Medical cannabis gardens are insurable. The market has already spoken, the government has nothing. Insurance companies don't insure properties that are major risks to public health and safety.