Legal Settlement Hands Marijuana Industry a Setback

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An anti-drug group has prevailed in its legal fight against a Colorado cannabis store and several financial services companies, which could present new challenges for the marijuana industry down the road.

The settlement is tied to a lawsuit Safe Streets Alliance filed on behalf of a Holiday Inn in the town of Frisco, Colorado. The suit claimed that the hotel would suffer financially if a cannabis store – Medical Marijuana of the Rockies – opened across the street.

The lawsuit was dismissed last month after two defendants – Merchants Bonding Company and Accounting Specialists – settled for $50,000 and $20,000, respectively, according to The Denver Post.

Medical Marijuana of the Rockies never opened in its planned location near the Holiday Inn, and it also had to close its original Frisco store, according to the Denver Post.

Another defendant, Bank of the West, was dropped from the lawsuit in February after it closed the store’s accounts.

The lawsuit was filed under the Racketeer Influenced and Corrupt Organizations Act, or RICO. Safe Streets is a plaintiff in another RICO suit aiming to shut down a Rocky Mountain Organics cultivation facility, claiming that it interferes in a couple’s plans to build a home near the grow site.

University of Denver law professor Sam Kamin told the Post he believes Medical Marijuana of the Rockies and its co-defendants would have prevailed in the case if it went to trial, saying that it’s “impossible” for companies to prove they will be harmed by the location of a marijuana business.

Nevertheless, he expects more legal fights of this nature.

“In fact, they’re going to be incredibly problematic for the industry going forward,” Kamin told The Denver Post.