Pubdate: Tue, 14 Jul 2015
Source: Denver Post (CO)
Copyright: 2015 The Associated Press
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Kristen Wyatt, The Associated Press

RICO USED AGAINST POT SHOPS

A Law That Was Intended to Fight the Mob Is Now Being Used in an 
Effort to Close Businesses.

A federal law crafted to fight the mob is giving marijuana opponents 
a new strategy in their battle to stop the expanding industry: 
racketeering lawsuits.

A Colorado pot shop recently closed after a Washington-based group 
opposed to legal marijuana sued not just the shop but a laundry list 
of firms doing business with it - from its landlord and accountant to 
the Iowa bonding company guaranteeing its tax payments. One by one, 
many of the plaintiffs agreed to stop doing business with Medical 
Marijuana of the Rockies, until the mountain shop closed its doors 
and had to sell off its pot at fire-sale prices.

With another lawsuit pending in southern Colorado, the cases 
represent a new approach to fighting marijuana. If the federal 
government won't stop its expansion, pot opponents say, federal 
racketeering lawsuits could. Marijuana may be legal under state law, 
but federal drug law still considers any marijuana business organized crime.

"It is still illegal to cultivate, sell or possess marijuana under 
federal law," said Brian Barnes, lawyer for Safe Streets Alliance, a 
Washington-based anti-crime group that brought the lawsuits on behalf 
of neighbors of the two Colorado pot businesses.

Lawyers on both sides say the Colorado racketeering approach is novel.

"If our legal theory works, basically what it will mean is that folks 
who are participating in the marijuana industry in any capacity are 
exposing themselves to pretty significant liability," Barnes said.

The 1970 Racketeer Influenced and Corrupt Organizations Act sets up 
federal criminal penalties for activity that benefits a criminal 
enterprise. The RICO Act also provides for civil lawsuits by people 
hurt by such racketeering - in this case, neighbors of the two 
businesses who claim the pot businesses could hurt their property 
values. If successful, civil lawsuits under the RICO Act trigger 
triple penalties.

Filed in February, the Colorado lawsuits have yet to go before a 
judge. But one has already had the intended effect.

In April, three months after the RICO lawsuit was filed, Medical 
Marijuana of the Rockies closed. Owner Jerry Olson liquidated his 
inventory by selling marijuana for $120 an ounce, far below average 
retail prices.

"I am being buried in legal procedure," Olson wrote on a fundraising 
web page he created to fight the lawsuit. The effort so far has 
brought in just $674.

The closure came after the pot shop's bank, Bank of the West, closed 
the shop's account.
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MAP posted-by: Jay Bergstrom