A Federal Court Just Opened the Door for Cannabis Opponents to Sue Weed Businesses for Racketeering
Denver’s 10th Circuit Court of Appeals shut down an attempt to end Colorado’s cannabis industry, but opened the door for individuals to fight their own anti-cannabis crusades using RICO.
Published on June 8, 2017

The gulf between individual states’ rights and federal drug laws has been a point of contention since California first legalized medical marijuana in the mid ‘90s. Now, with medical marijuana on the books in more than half of the country and recreational legalization in eight states and Washington D.C., it is another set of federal laws that could spell danger for legal weed businesses across the country. 

According to the Cannabist, a ruling in Denver’s 10th Circuit Court of Appeals yesterday reversed an earlier district court decision, and will now allow Michael P. Reilly and Phillis Windy Hope Reilly, the owners of a Pueblo, CO ranch, to sue a neighboring cannabis cultivation facility for supposed damages under the grounds of federal racketeering statutes.

And while the same Colorado appeals court shut down Nebraska and Oklahoma’s attempts at intervening in the Rocky Mountain State’s voter approved cannabis initiative and threw out the idea of using the federal Controlled Substance Act to circumvent local legalization, cannabis opponents see the early win for the racketeering argument as a kink in the armor of marijuana reform.

“This is basically a road map for people who own property that is near (a marijuana facility) … for how to bring a federal suit to get relief,” Brian W. Barnes, an attorney for plaintiff Safe Streets Alliance, a Washington, D.C.-based anti-drug organization that is helping the Reilly’s sue their neighbor over the smell of cannabis and the what they claim are diminished property values.

It’s not exactly clear what damages the Reilly’s were subject to, but Matthew Buck, the attorney representing the cannabis cultivators being sued, is confident that the Reilly’s will have a hard time proving any wrongdoing by the legal growers.

In an email correspondence to the Cannabist, Buck said that the Reilly’s “will have a difficult time proving that marijuana diminished their property value, or any property in Colorado,” and, while discussing the claims of a “noxious odor,” Buck called out the Reilly’s agricultural double standard, “my clients did not complain when odors of manure wafted onto their delicious marijuana crop.”

“We will vigorously fight this case should the Reillys … choose to pursue it in the District of Colorado,” Buck continued. “We found the claims not meritorious initially, the District Court agreed, and it will be up to a jury of Colorado voters to see whether they think D.C. special interest groups should meddle in Colorado citizens’ right to self-govern.”

Still, if the Reillys are successful in their lawsuit, RICO, the federal racketeering statute famously used to take down organized crime syndicates and white collar criminals could be the new norm for aggravated farmers looking to narc out their neighbors.

To try and stem that possible tide, the court of appeals added a caveat in their decision that acknowledges the Reilly’s case but warns about the use of federal RICO statute in future cannabis cases. 

“We are not suggesting that every private citizen purportedly aggrieved by another person, a group, or an enterprise that is manufacturing, distributing, selling, or using marijuana may pursue a claim under RICO. Nor are we implying that every person tangentially injured in his business or property by such activities has a viable RICO claim. Rather, we hold only that the Reillys alleged sufficient facts to plausibly establish the requisite elements of their claims against the Marijuana Growers here. The Reilly’s therefore must be permitted to attempt to prove their RICO claims.”

If the Reilly’s case is successful the farmers could get a court order forcing the neighboring cannabis company to shut down indefinitely.

Zach Harris
Zach Harris is a writer based in Philadelphia whose work has appeared on Noisey, First We Feast, and Jenkem Magazine. You can find him on Twitter @10000youtubes complaining about NBA referees.
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