RICO Claims Against Cannabis Companies Are Evolving –

29 September 2022

Duane Morris LLP

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A few years ago, a trend began to emerge – driven by the
anti-cannabis lobby – of civil claims being asserted against
state-licensed cannabis operators under the Racketeer Influenced
and Corrupt Organizations Act.

The suits were brought in an attempt to curtail operators’
state-legal cannabis activities based on the allegation that such
activities violated the federal Controlled Substances Act and
thereby satisfied the predicate act requirement under RICO.

In all such cannabis-related RICO cases, the plaintiffs’ bid
for a civil judgment failed, and the trend of civil RICO claims
against cannabis operators seemed to vanish as quickly as it
appeared.

Recently, a putative class action, Plumlee v. Steep Hill
Inc., was filed in the U.S. District Court for the Eastern
District of Arkansas against four state-licensed cannabis
operators, asserting civil RICO claims arising out of allegations
that the operators falsified the amount of THC in their cannabis
products.

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Disclaimer: This Alert has been
prepared and published for informational purposes only and is not
offered, nor should be construed, as legal advice. For more
information, please see the firm’s
full disclaimer.

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