Special Report

Cannabis and the Legal Industry: New Rules, New Risks, New Opportunities

The state-by-state legalization of marijuana for medical and recreational use has created a complicated legal landscape—and with it new demands for lawyers to responsibly advise cannabis clients and companies in adjacent industries. This special report features Law.com's in-depth coverage of emerging legal issues, key regulatory developments, and the lawyers who are helping to shape a new industry.

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Matthew J. Smith of Saul Ewing Arnstein & Lehr. Matthew J. Smith of Saul Ewing Arnstein & Lehr.

With a growing number of states legalizing medical and adult-use marijuana, anti-cannabis plaintiffs have turned to innovative legal theories, including RICO racketeering and conspiracy claims, aimed at disrupting cannabis businesses. Over the past few years, RICO (the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961 et seq.) has become a novel tool for plaintiffs in civil actions against cannabis businesses in states including Oregon, Colorado, California, Massachusetts and New York. Because marijuana remains illegal under the federal Controlled Substances Act, state-legal marijuana businesses, by definition, involve racketeering activity in violation of RICO. Fortunately for the industry, plaintiffs have not seen much success in court so far. However, their failures have not deterred other plaintiffs from pursuing these claims, and the decisions disposing of many of these cases have simultaneously created blueprints on how new plaintiffs might succeed. Notably, the risks in these cases are high, with cannabis businesses and those associated with them facing mandatory treble damages and attorney fees. Until legalization takes place at the federal level, these claims will likely keep coming, and it is probably only a matter of time before the first succeeds.

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