Business

Two cannabiz lawsuits allege public corruption

By Alex Halperin
Aug 30, 2021

In recent years, legalization opponents have used racketeering (RICO) lawsuits to go after cannabis businesses. By arguing that PotCos are engaged in criminal conspiracies, these suits can bring potent legal weapons, such as the threat of asset seizure, to bear against defendants. While the suits against cannabis companies generally haven’t been successful, a couple have been watching closely and have now filed RICO suits of their own.
Law360, MJBiz

  • In the first, San Diego dispensary March & Ash, is suing a former Captain in the San Diego Sheriff’s Department who was sentenced to two years in federal prison for crimes including “corrupt conduct relating to unlicensed marijuana dispensaries.” The suit alleges a long list of co-conspirators including an alt-weekly newspaper that ran ads from unlicensed dispensaries.
    Voice of San Diego
  • In the second suit, four Mendocino County growers allege “that a ring of corrupt authorities have conspired against legal cannabis operators for years, stealing from marijuana farmers and then covering up the thefts.” 

It’s not yet clear whether these suits will benefit plaintiffs, but some observers think they could become a more common tool for the industry.

  • One California exec “thinks a civil RICO lawsuit might be the only answer for alleged corruption along California’s central coast.”

Read the MJBiz piece.