Federal appeals court judges are reviewing how far certain racketeering laws can be extended in a case that could threaten the right to recreational marijuana in California.
The U.S. Court of Appeals for the Tenth Circuit reportedly took oral arguments in a case that consolidates several claims and argues the recreational marijuana law in Colorado violates U.S. racketeering and controlled substances law. Both Oklahoma and Nebraska joined the claim after the U.S. Supreme Court decided not to consider an earlier case they brought asserting Colorado’s pro-marijuana law was unconstitutional and illegally facilitated the industrialization of marijuana. The consolidated appeals also contain complaints from several county sheriffs offices as well as a horse ranch.
Plaintiffs assert that neighboring states have had to contend with federally-illegal substances crossing their borders, causing a strain on local law enforcement and other interested parties. The federal appellate court judges are now considering whether RICO or other federal statutes should have an impact on marijuana cultivation on properties (particularly those near Denver, where this case is being considered).
The attorney representing several marijuana businesses said he initially went into the matter believing the outcome would be a “slam dunk” in favor of his clients. However, following the oral arguments, he conceded it might be “more of a toss-up.”
Horse ranch plaintiff explained to the judges that the smell of the substance being grown nearby had resulted in property values plummeting. Additionally, he argued, construction of a green house on site also affected property values by obstructing the sight lines from his property.
As defendant’s attorney explained, if the justices ruled that the case should be remanded back to district court, it would result in opening the floodgates, making every dispensary in Tenth Circuit vulnerable to federal lawsuit under RICO laws.
For those unfamiliar, RICO stands for the Racketeer Influenced and Corrupt Organizations Act. It has been historically used to implicate fraudsters and crime families. It gives private individuals the right to sue “racketeers” whose actions damage their property or business. In this case, plaintiffs are asserting damage to their property values.
In effect, plaintiffs argue, the state has authorized breach of the U.S. Controlled Substances Act.
Another big reason for concern at this point is that this new presidential administration does not have a reputation of being kind to those with marijuana interests. In particular, the incoming U.S. attorney general Jeff Sessions has been extremely critical of legalized marijuana and of those who use the drug. As of right now, most marijuana dispensaries are leaning on the 2013 Cole Memo, in which the federal government outlined a road map for federal prosecutors to abide in states where marijuana is legal. Essentially, where state laws regulate the sale of marijuana, this was to be seen as a means of enforcement. But this memo did not legally solidify any protections, and it could just as easily be retracted by the new administration.
In the event the appellate court chooses not to send the case back to district court for trial, plaintiffs could appeal the matter to the U.S. Supreme Court. However, those involved say such a move would be unlikely.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.
Bid to take down Colorado marijuana laws revived in court, Jan. 17, 2017, By Alicia Wallace, The Cannabist
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Cannabis Business Licensing Woes in Portland Costing $22M/ Month, Jan. 18, 2017, L.A. Marijuana Lawyer Blog