Pubdate: Thu, 31 Dec 2015
Source: Denver Post (CO)
Copyright: 2015 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Ricardo Baca

BUSINESSES SETTLE AFTER FRISCO HOTEL SUES POT SHOP

Cannabis opponents' victory in the high-profile racketeering lawsuit 
may open up others in the industry to potential liability under RICO.

A high-profile racketeering lawsuit against a proposed Summit County 
marijuana shop and companies that did its banking, bonding and 
accounting settled in U.S. District Court this month - a substantial 
victory for cannabis opponents hoping to stun legalization efforts in America.

The lawsuit, filed by the anti-drug group Safe Streets Alliance on 
behalf of the Holiday Inn hotel in Frisco, focused on property 
owners' rights under the Racketeer Influenced and Corrupt 
Organizations Act. It claimed the hotel's business suffered because 
of Medical Marijuana of the Rockies' plans to move its shop into a 
building across the parking lot from the hotel.

The shop never made the move and was "forced to close" its previous 
Summit County location as a result of the court case, according to a 
note on its website. Two companies that did business with Medical 
Marijuana of the Rockies settled for a total of $70,000, and the 
lawsuit was dismissed Dec. 10, according to court documents.

"The concern was that the hotel's customers would be put off by the 
opening of the facility, which was immediately across the parking lot 
from the hotel," said Brian Barnes, a Cooper & Kirk attorney 
representing Washington, D.C.-based Safe Streets. "As we understand 
the law under RICO, anyone who provides services to a marijuana 
operation is exposing themselves to potential liability under RICO."

The lawsuit was one of four filed against Colorado officials and 
businesses challenging the state's legal cannabis laws - and is the 
first to reach its end.

One defendant, Bank of the West, was dropped from the lawsuit in 
February after it closed all bank accounts belonging to Medical 
Marijuana of the Rockies owner Jerry Olsen and denied that it knew 
the nature of Olsen's business. Another defendant, Merchants Bonding 
Company, settled for $50,000, according to vice president of 
marketing Therese Wielage.

"We do not work with marijuana companies," Wielage said. "We made a 
decision not to do that anymore."

A third defendant, Nederland-based Accounting Specialists, settled 
for $20,000, according to court documents. Owner Michael Massa, also 
named individually as a defendant in the lawsuit, declined to comment 
when he was contacted Wednesday.

"At that point, the hotel had basically recovered more in damages 
than it had actually sustained," said Safe Streets' attorney Barnes 
of the $70,000 in settlement money.

Drug law expert Sam Kamin believes Safe Streets and the hotel would 
have lost at trial, but he understands why it was best for the 
non-marijuana companies to settle.

"There was a lot of fanfare when these suits were filed and very 
little when this one was settled," said Kamin, a law professor at the 
University of Denver. "I still think that it'll be impossible for any 
business to show that they were harmed by the location of a marijuana business.

"But it doesn't mean that these suits are pointless or 
non-problematic for the industry," he said. "In fact, they're going 
to be incredibly problematic for the industry going forward. The 
folks who helped to bring this suit and sought out plaintiffs for 
this suit are looking for more and other lawsuits."

Safe Streets is a plaintiff in another Colorado lawsuit that makes 
RICO claims against a marijuana company and businesses related to it. 
The case also claims the federal prohibition of marijuana sale and 
cultivation trumps state rules and names the Pueblo County 
commissioners, Gov. John Hickenlooper and other state officials as defendants.

In that lawsuit, co-plaintiffs Hope and Michael Reilly claim that 
construction of Rocky Mountain Organics' recreational marijuana 
cultivation facility in Rye interferes with their views and plans to 
build a home and work space on 105 acres of land southwest of Pueblo.

That case is pending in U.S. District Court in Colorado.
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