When the prey becomes the hunter: cannabis companies turn to RICO
Since 2015, we have been writing articles about Racketeer Influences and Corrupt Organization Act (“RICO”) litigation and cannabis companies. See:
RICO has A thorn In the cannabis industry, but not necessarily for actual criminal reasons related to federal illegality.Instead, it is mainly used Neighboring Opposing cannabis companies in a civil capacity and trying to squeeze them out, based on the theory that trafficking in illegally controlled substances (and other required RICO elements) is an extortion activity. NIMBYs do not necessarily seek to gain the upper hand on merit; their goal is simply to make cannabis companies spend expensive money to protect them.
In an interesting turn of events, it was reported that MJ Business DailyIt seems that some marijuana companies may now be trying to use RICO to hunt down illegal marijuana clothing in the country. These companies are also chasing third parties who support or support or “help and abet” the country’s illegal market cannabis operators (if you ask me, that’s smart).
As a reminder, RICO is a federal law in 1970 that was originally designed to combat organized crime (that is, thugs).Among other functions, it allows ordinary citizens to claim loss of property value Civil Initiate a lawsuit of triple damages plus attorney’s fee against any “individual” or “enterprise” involved in any “extortion activity” model. In order to establish a federal civil RICO violation, seven elements must be met:
- Only “persons” can sue or be sued;
- The plaintiff must prove that the defendant participated in “extortion activities”;
- The “mode” must include at least two extortion acts within 10 years of each other, and at least one act occurred after the effective date of the regulation;
- There needs to be an “enterprise” as a tool or target of extortion activities;
- The business must engage in or influence interstate commerce;
- The plaintiff must claim and prove the damage to its business or property; and
- The plaintiff must prove that their injury was caused by extortion.
Note that extremely It is difficult to win a civil RICO case because the threshold for the plaintiff to meet all the above elements is very high.
Nonetheless, two state-licensed cannabis companies are operating in San Diego (owned by marijuana retailer Valley Greens Retail Outlet, Inc. d/b/a March and Ash) and Mendocino County (owned by four marijuana growers). These leaps in civil RICO lawsuits initiated by individuals constitute the business of Goose Head Valley Farms).A copy of the complaint can be found here with here.
Both of these lawsuits are fascinating because even if state law allows and permits them, all cannabis businesses are illegal within the federal sphere.In fact, a court in California Be fired In the RICO lawsuit filed by a cannabis company, the court found that the plaintiff was not eligible to file a lawsuit under federal law because marijuana is illegal in the federal state. Nevertheless, regardless of federal illegality, because these newer cases are brought under California’s RICO regulations (similar to federal law), status may not be an issue—of course, unless the defendant attempts to file a federal court File a lawsuit. After all, the plaintiff is a cannabis company licensed by the state.
In the March and Ash lawsuits, the plaintiff claimed that some of the defendants who constituted unlicensed (and without local approval) retail establishments received illegal help and support from the following organizations:
- The defendant landlord who leased space to them;
- The defendant advertisers allowed illegal operators to publish illegal sales advertisements (including San Diego Reader);
- The “owners and operators” of ATM machines in illegal pharmacies claim to be legal on paper and assist in money laundering;
- Manufacturers of cannabis products that sell these products to illegal operators; and
- Allegedly, law enforcement agencies provided these illegal operators with information such as raids to avoid criminal penalties and be completely shut down.
On the last note, the U.S. Attorney’s Office for the Southern District apparently has evidence that at least one former San Diego County Sheriff notified an impending raid on an illegal pharmacy, and that the sheriff also pressured another illegal pharmacy. It hires a family member. Receive the same rebate. The Mendocino lawsuit mainly accuses state and local law enforcement officials of organized corruption and crimes against cannabis growers in order to establish a model of extortion.
I am more concerned about the March and Ash lawsuit, because it brings up one of the main problems of California cannabis—the illegal, unlicensed market is raging, and licensees have difficulty complying with excessive state and local barriers and incredible High taxes.
In fact, in order to better survive in the market, cannabis companies should not bear the brunt of these difficult-to-win lawsuits. Instead, the Department of Marijuana Control and local and state law enforcement should better and more consistently shut down these rampant illegal operators. Destroy the entire democratic experiment legalization. This will include hunting down third-party advertisers and online platforms that continue to use these unlicensed criminals to promote and promote cannabis sales. However, before that, I was not shocked that the industry started to self-regulate and deal with the problems by submitting these issues to public courts. Good luck to them.