A weaponized NIMBY loses a closely watched case … for now

In a case closely watched by many in the industry, a Colorado federal jury last week rejected the arguments of a neighbor who filed a Racketeer Influenced and Corrupt Organizations (RICO) Act lawsuit against a cannabis cultivator, claiming the facility’s smells and sounds damaged their property.

In the hands of prosecutors, it’s a hacksaw for taking apart organized crime, but its application as a private cause of action for an “adjacent property nuisance” is an attractive weapon in the arsenal for proponents of NIMBY — aka, not in my backyard — some experts say.  

"Although NIMBY proponents might attempt to hijack RICO to block marijuana related businesses from their neighborhood, the landmark Windy decision suggests that the strategy is incapable of withstanding a legal challenge,” said Hoban Law Group senior attorney Steve Schain.

RICO is particularly attractive to plaintiffs — and potentially costly to defendants — because it allows for the recovery of triple the actual damages and attorneys fees for acts performed as part of an “ongoing criminal organization,” called an “enterprise,” Schain said.

With respect to the cannabis industry, anyone involved in planting, cultivation, harvesting, processing/extracting, testing, packaging, disposal, transporting and dispensing cannabis falls under that definition of a criminal organization due to the federal prohibition of the plant, he said.