Colorado Cannabis Ruling Could Be A Game-Changer
Phillis Windy Hope Reilly and Michael P. Reilly own three lots in a Rye, Colorado, development called the Meadows at Legacy Ranch. They don’t actually live there, but they like to visit there occasionally so their kids can engage in outdoor recreational activities, such as horse back riding and hiking. A cannabis grow owned by Alternative Holistic Healing LLC is adjacent to the Reillys’ property and the Reilly’s do not appreciate their neighbors, to say the least. They claim “growing recreational marijuana is ‘noxious, annoying or offensive activity’ by virtually any definition because marijuana plants are highly odorous, and their offense smell travels long distances” according to a lawsuit the couple filed. Further, the grow violates assorted covenants governing Meadows at Legacy Ranch, meaning it impedes on the couple’s ability to enjoy their land the way they’d like. A building under construction on the grow site “exacerbates the injury, for when the Reillys and their children visit the property, they are reminded of the racketeering enterprise next door every time they look to the west.” The Reillys feel “the large quantity of drugs at marijuana grows makes them targets for theft, and a prospective buyer of the Reillys’ land would reasonably worry that the 6480 Pickney Road marijuana grow will increase crime in the area.”
The couple cited the Racketeer Influenced and Corrupt Organizations Act (RICO) statute in their filing, and this impressed the U.S. Court of Appeals for the Tenth Circuit court, which rejected a claim that the Amendment 64 legalizing recreational cannabis sales in Colorado was preempted by the Controlled Substances Act. The court submitted its ruling on June 7th, and it states that neither the landowners, Phillis Windy Hope Reilly and Michael P. Reilly, nor Safe Streets Alliance, an anti-pot interest group supporting them, “purport to have any federal substantive rights that have been injured by Colorado or the county’s actions.” The court found that the plaintiffs’ use of the Racketeer Influenced and Corrupt Organizations Act (RICO) statute had merit, adding that “the landowners have plausibly alleged at least one…claim against each of those defendants. We therefore reverse, in part, the dismissal of those claims and remand for further proceedings.”
The document goes on to state, “RICO is founded on the concept of racketeering activity. The statute defines ‘racketeering activity’ to encompass dozens of state and federal offenses, known in RICO parlance as predicates. These predicates include any act ‘indictable’ under specified federal statutes,” and among them is “drug-related activity that is ‘punishable’ under federal law.” As used in this particular case, “racketeering activity” includes “dealing in a controlled substance or listed chemical”. It also includes “any offense involving…the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled substance or listed chemical, that is “punishable under any law of the United States”…. In other words, operating a marijuana cultivation facility of the type the Reillys described would involve some racketeering activity. The court stated, “We conclude the Reillys have adequately alleged that the Marijuana Growers are each engaged in racketeering activity.”
The court’s ruling opened the doors for future similar litigation and could mean that other individuals or groups would be able to file complaints against cannabis businesses using RICO on such a large scale that the entire industry could goes underwater.