The term ‘RICO’ stands for the Federal Racketeer-influenced and Corrupt Organizations Act. If you run any type of marijuana business, it is very important to read and understand this statute, why?
This statute lets people sue other people for racketeering, what is racketeering you ask?
Racketeering is simply the act of offering a dishonest service to solve a problem that wouldn’t exist without the enterprise offering the service. That’s according to Investopedia. Under the RICO law crimes that constitute racketeering otherwise known as “predicate” offenses include:
- Drug dealing
- wire fraud
Under federal law, marijuana is an illegal substance meaning if you run a marijuana business even if it’s in a state where it’s legal to do so, you are considered a drug dealer. Here is what you should be worried about. RICO contains a civil remedies provision that “vests a private citizen with substantive rights to avoid ‘injuries’ to ‘his’ business or property’ caused by a pattern of racketeering activity”.
In theory, that neighbor of yours who is always complaining about the odors that come from your business has the right to take you to court, why? The smells or your activities might be lowering your neighbor’s property value or someone might claim that the amount of weed you keep in your home or business is making the area unsafe.
In simple terms, this law allows individuals or groups who oppose marijuana legalization to use it as a tool to run you out of business. The worst part is it comes with severe financial penalties and a 20-year prison term if you are unlucky.
A Legal Shakedown
The funny thing is some legal education companies now offer courses instructing lawyers how to sue marijuana businesses using RICO. That means that people are getting good at it.
If you choose to defend yourself, there is no guarantee that you will win the case, but it may act as a deterrent i.e. you don’t go down without a fight. If you are facing this type of lawsuit right now, settling may seem like a good option but don’t do it. Instead, lawyer up and fight for your business, why?
The problem with settling is you open doors to more lawsuits, think about it, if one neighbor sues and you settle another one might do the same thing and so on until you are out of business.
The question is what defenses are available?
Legal Defense Against RICO Marijuana Lawsuits
The RICO act can be prosecuted in either a federal or state court. Both options provide extended criminal penalties depending on the nature of the offense. If your activities ‘harm’ a person or business for example if someone claims that your business or activities devalued his/her property, he or she is permitted to file a civil suit seeking three times as much in damages. That’s right; a person can recover three times more damages than incurred. This makes RICO very attractive to extortionists.
The law is very complex so I advise you to find yourself a good lawyer.
The best defense you have against RICO is to solve the problem before it happens, how do you do that?
Choose the Location of your Business Wisely
Who are your neighbors? Do they have a problem with your activities? Are you violating zoning laws? These are just but a few questions you should ask yourself when picking a location for your marijuana business. See the thing is there are people out there who are waiting for you to fuck up. If that happens, someone might get a huge payday out of you. My advice, avoid setting up grow facilities or storage facilities in heavily populated areas.
If you are renting, you’d better be on the same page with your landlord especially if you have to share the building or facility with other businesses. It is also very important to talk to neighbors. If there is too much opposition, it is best to move your business before someone decides to take you to court.
If you are new to this, you should find someone who understands zoning laws in your area. Talk to people who run the same type of business you intend to set up or talk to a lawyer and find out what works.
Don’t rely on brokers; most of them are just out to get a quick buck. Instead, do your own legwork or talk to a real estate professional.
Related: What are “Drug-Free Zone Laws”?
The Deed is Done, I’m Getting Sued What do I do?
As mentioned above, don’t settle, fight for your right to run your business.
See the thing is there are many legal hurdles and factual requirements a plaintiff must go through or prove in order to win. In most cases, the suit gets thrown out. If you choose to settle, you may end up paying someone money you didn’t have to pay.
Keep in mind that you stand to lose a lot of money if you lose.
When a suit is brought against you it is very important to understand what the claims are and if they can be proved. A person who understands RICO will guide you through the process, therefore, the first thing to do when facing charges is to have an experienced lawyer review the claims brought against you.
What RICO Requires
Under RICO, a plaintiff has to prove several occurrences or a “pattern” of predictable offenses, for example, if he or she complains about an odor coming from your business. The person has to build a pattern around that claim.
In most states, if you are served with a lawsuit today, you have 30 days to respond. Don’t sit on your ass; instead, get the suit reviewed by an experienced attorney immediately.
There are three key terms in RICO that you should be aware of:
- Person: this is an individual or entity capable of holding a legal or beneficial interest in property (corporations, associations, individuals, and partnerships).
- Pattern of racketeering: the law requires at least two acts of racketeering activity at least two years apart.
- Enterprise: any individual, partnership, corporation, association, or other legal entity and union or group of individuals.
Before a pattern is established, a relationship between the two ‘offenses’ must be demonstrated. Meaning a pattern is the key concept in the statutory framework of RICO. The problem is it is not clearly defined.
The point is, if someone can paint a clear picture of your illegal activities or offenses committed by you against him/her, they can use RICO against you. So pick your location wisely and keep an eye on anything that might be negatively affecting your neighbors.