Although federal racketeering statutes haven’t been employed regularly against marijuana businesses, that could be changing.
One Colorado cannabis shop shut down recently after its owner decided that he simply couldn’t afford to keep paying for a legal battle with a Washington DC-based organization that sued his store and many of his business partners under federal racketeering laws, the AP reported.
Medical Marijuana of the Rockies, which was based in the mountain town of Frisco, was forced to close when the other defendants named in the suit quit doing business with the store, according to the AP. Bank of the West, for instance, canceled the shop’s account as a result of the legal action.
The lawsuit was filed in February and utilized the Racketeer Influenced and Corrupt Organizations Act, which was set up to fight organized crime and paves the way for criminal penalties tied to activities that aid criminal organizations. Under the statute, individuals who claim they were harmed by racketeering can also file civil lawsuits.
In this case, neighbors of the cannabis shop said the business lowered their property values, according to the Associated Press.
Medical Marijuana of the Rockies shut down just three months after the lawsuit was filed. Owner Jerry Olson recouped what he could, selling his flower inventory for $120 an ounce. The case was never even heard by a judge.
A parallel lawsuit has been filed against another cannabis shop, though that store continues to operate and is even expanding.