When the Hunted Becomes the Hunter: Cannabis Companies Turn to RICO
We’ve been writing about Racketeer Influenced and Corrupt Organizations Act (“RICO”) lawsuits and cannabis companies since 2015. See:
RICO has been a thorn in the side of the cannabis industry, but not necessarily for actual criminal reasons relative to federal illegality. Instead, it’s been used predominantly by NIMBYs against cannabis companies in a civil capacity to try to squeeze them out of existence, on a theory that trafficking in an illegal controlled substance (amongst other required RICO elements) qualifies as racketeering activity. NIMBYs don’t necessarily seek to prevail on the merits; their goal is to just make the cannabis company spend a prohibitive amount of money defending them.
In an interesting turn of events, as reported by MJ Biz Daily, it seems that some cannabis companies may now be trying to use RICO in their favor to go after state-illegal cannabis outfits. These businesses are also chasing third parties that support or enable or “aid and abet” state-illegal market cannabis operators (pretty clever if you ask me).
As a reminder, RICO is a 1970 federal law originally intended to combat organized crime (namely, the mob). Among other features, it allows average citizens claiming a loss in property value to bring