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Opponents of legal marijuana businesses have employed the Racketeer Influenced and Corrupt Organizations (RICO) Act to effectively shut down at least one cannabis-based facility in Colorado.
The 45-year-old federal law has made an appearance as a legal strategy to damage an emerging industry in states that have voted to legalize marijuana and to stem the spread of legalization nationwide. Opponents to legalization say that while marijuana has been approved for use in 23 states and the District of Columbia, its production and distribution is still considered organized crime by federal law.
One Colorado business recently liquidated its inventory and closed down after being sued. The lawsuit named not only the cannabis-based business, but also its landlord, its accountant, and an Iowa bonding company as defendants. Medical Marijuana of the Rockies shut its doors after the companies working with it were released from the suit after agreeing to cease doing business with the company.
The business closed just three months after the suit was filed. Jerry Olson, the owner, wrote on a Web page designed to raise money to combat the lawsuit:
“I am being buried in legal procedure.”
A court order in the case states that Bank of the West’s policy is that it does not offer accounts to businesses that deal with recreational marijuana. The Iowa bonding company in the suit paid $50,000 to be released from the case. Therese Wielage spoke for Merchants Bonding Company Mutual when she stated,
“We are out of the business of bonding marijuana businesses in Colorado and elsewhere until this is settled politically.
Brian Barnes is a lawyer for the Washington-based group Safe Streets Alliance. The group took up the suit on behalf of neighbors of Medical Marijuana of the Rockies. The neighbors claimed that the business diminished property values. Barnes holds that the RICO Act leaves the marijuana industry vulnerable to debilitating liability. Barnes stated,
“We’re putting a bounty on the heads of anyone doing business with the marijuana industry. Just because you see what appears to be this unstoppable growth of marijuana, we disagree. We’re starting to change the economics of the marijuana industry.”
Alternative Holistic Healing, a dispensary in southern Colorado, is standing tough in the face of a separate lawsuit. Neighbors have filed a suit claiming the construction of a 5,000-square-foot growing facility will obstruct their view. Both the insurance company and construction firm attached to the job remain at work. Matthew Buck, the lawyer representing Alternative Holistic Healing, reported,
“It’s a frivolous lawsuit.”
The move to apply racketeering laws to the marijuana industry may be a sign of a renewed resolve of opponents to widespread legalization.
photo credit: Ben Trollinger of Summit Daily