Judge dismisses California cannabis racketeering suit

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A federal judge dismissed a $200 million civil racketeering lawsuit filed by a Southern California cannabis farmer against another grower, ruling the claim had no standing because marijuana is illegal under federal law.

The case was an unusual twist on lawsuits that have been filed against marijuana cultivators under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Most RICO suits have been filed by anti-cannabis individuals seeking to shut down marijuana cultivation operations on the claim they lower property values because of odors and security concerns.

But the California case involved former marijuana business partners.

Plaintiff Francine Shulman, a Santa Barbara County businesswoman, filed the suit in June 2019 alleging that operators of Vertical Companies, a Los Angeles-based marijuana cultivation firm, schemed to defraud her and steal her 1,500-acre farm.

U.S. District Judge André Birotte Jr. ruled that it is unlikely that RICO “was designed to provide redress” for federally illegal activities, Law360 reported.