United States: Federal Appeals Court Quashes States’ Attempt To Halt Colorado’s Recreational Cannabis Law, Allows RICO Suits

Court Quashes States’ Attempt To Halt Colorado’s Recreational Cannabis Law, Allows RICO Suits

By Michael Bachara
Hemp News

Last Wednesday, a three-judge panel for 10th U.S. Circuit Court of Appeals in Denver upheld a lower court’s dismissal of Nebraska and Oklahoma's attempt to overturn Colorado’s recreational cannabis law, according to the Denver Post.

The judges ruled that private landowners, law enforcement officers and neighboring states that claimed harm from cannabis legalization cannot use the federal Controlled Substances Act to challenge Colorado’s legal recreational marijuana regime. The judges also closed the door on Nebraska and Oklahoma’s pushes to intervene in the case after their similarly directed complaints to the U.S. Supreme Court were denied a hearing.

In a second case, the appeals court panel reversed a district court decision against Michael P. Reilly and Phillis Windy Hope Reilly, the owners of a Pueblo ranch, who sued a neighboring cultivation facility claiming noxious odors and diminished property values. The judges left the door open on the issue of federal racketeering claims against neighboring marijuana grows and dispensaries, by remanding the case to district court. In their 90-page opinion, the judges appeared to express caution and set boundaries on any potential future claims, stating:

"We are not suggesting that every private citizen purportedly aggrieved by another person, a group, or an enterprise that is manufacturing, distributing, selling, or using marijuana may pursue a claim under RICO. Nor are we implying that every person tangentially injured in his business or property by such activities has a viable RICO claim. Rather, we hold only that the Reillys alleged sufficient facts to plausibly establish the requisite elements of their claims against the Marijuana Growers here. The Reillys, therefore, must be permitted to attempt to prove their RICO claims."

“I think it’s unlikely that we’ll see a federal court striking down Amendment 64 in its entirety,” said Christopher Jackson, a Denver-based attorney for the Sherman & Howard firm who is not a party to the case, referencing Colorado’s voter-approved 2012 measure legalizing and regulating adult-use marijuana. “I don’t think there’s any kind of a procedural vehicle to do that anymore.”

"The biggest takeaway from the ruling is that local and county governments are protected", said Tom Downey, a former state business licensing regulator who now is an attorney specializing in legal cannabis issues.

“When I was the regulator in Denver, I worried about signing marijuana licenses,” Downey said. “These RICO suits have been a big concern for small, local jurisdictions particularly. You’ll hear a collective sigh of relief from counties and municipalities with this opinion, as well as from Colorado and other state governments.”

In March of 2016, the U.S. Supreme Court decided by a 6-2 vote not to take up Nebraska and Oklahoma’s joint lawsuit, which was filed in 2014.

Photo Source: Fox 31, Denver