A federal appeals court ruled the owners of a southern Colorado horse farm can sue a neighboring marijuana cultivation warehouse for damages because of odors and other nuisances that could hurt property values.
The 10th Circuit Court of Appeals in Denver also ruled that the Pueblo-area farm’s owners cannot sue the state of Colorado and local officials to compel it to enforce federal drug laws and shut down the grow site, according to The Associated Press.
The horse farm ruling could prove a major problem for the cannabis industry. The case was brought under the Racketeer Influenced and Corrupt Organization Act, which allows plaintiffs to seek damages from illegal enterprises.
While the grow site is legal under Colorado law, it is illegal under federal law. That means the ruling could inspire more lawsuits against growers, which could be a major drain on their finances, Reason.com reported.
The case goes back to 2015, when farm owners sued to stop the grow site from opening. A federal district judge ruled against the farmers, who appealed.
While the panel of three judges on the federal appeals court ruled that the horse owners have the right to have their case heard, they also made clear that they were not ruling on whether the plaintiffs were owed damages.