A Colorado jury gave a cannabis grower in a racketeering lawsuit an important victory this week, and it’s a landmark win for the marijuana industry as it fights claims alleging MJ cultivators create “noxious odors” and other nuisances that could hurt nearby property values.
Walton, who runs CannaCraft, a small-batch marijuana greenhouse in southern Colorado, suggested in a recent interview with Marijuana Business Daily that if he were to suffer a large monetary loss related to the suit, it would put him out of business.
Here are basics you need to know about the Racketeer Influenced and Corrupt Organizations Act (RICO) and the cannabis industry:
- Suits using the same strategy have been filed in California, Massachusetts and Oregon, claiming the smell of marijuana damages neighboring owners’ ability to enjoy their land or depresses their property value. But this was the first time a jury heard a case.
- A recent federal court ruling in Oregon also suggested plaintiffs face a high burden of proof. In that case, the judge dismissed claims, ruling the plaintiffs failed to show a concrete loss in the value of their property.
- The suits have been filed under RICO, which allows private parties to claim their business or property has been damaged by a criminal enterprise.
- RICO was first enacted to fight the Mafia in the 1970s but expanded to include illegal drug trafficking. The law allows plaintiffs to be compensated for their damages times three, plus attorneys’ expenses.
CannaCraft’s Walton runs a state-legal MJ business, and the lawsuit was filed under the premise that cannabis is illegal on a federal basis.
The Colorado lawsuit was filed by Michael and Phillis Hope Reilly, who bought property adjacent to the cultivation facility.
They claimed in court filings the marijuana operation emitted a “noxious odor” that had diminished the value of their property. They also complained about traffic, safety and impaired views.