Jason’s article aptly summarized the Valley Greens RICO filing against illegal businesses in California — and the bigger news is that more lawsuits in this vein are being filed. Of course, just this week singer R. Kelly was convicted of racketeering in his landmark Brooklyn trial, determining that Kelly’s “enterprise” of managers, bodyguards, drivers, personal assistants and others in his entourage all made up a group guilty of illegal conduct, including kidnapping, sexual exploitation and bribery.
Now for cannabis operators, the tables are turning. For years, unlicensed cannabis dealers and corrupt law enforcement officials have been on the receiving end of RICO lawsuits. Legal cannabis operators can increasingly employ RICO as a weapon against these same illegal businesses who are impeding their own operations.
The newest RICO complaint comes from four licensed cannabis farmers in California’s Mendocino County, doing business as Goose Head Valley Farms. Their action is being taken against two former law enforcement officials said to be corrupt: a Mendocino County deputy sheriff and a California State Department of Fish and Wildlife official. The suit alleges that the two officers colluded to steal cannabis, guns and cash from farmers and conspired with others in their offices and local judges to cover up the thefts. The initial hearing is scheduled for February 2022.
Both of these cases were filed in state courts, but there is the possibility either or both could be moved to federal court. In that event, it may be harder for the plaintiffs to score victory, as the standards for RICO convictions are higher in the federal space where cannabis remains technically illegal.
Yet with the frequency of local corruption occurring in localities where cannabis has long been available — California’s central coast has been a hotbed of complaints for years — legitimate businesses can find themselves in dire straits and need to pursue legal remedies against offenders. While RICO cases are not the easiest to win, with a very high bar set by the courts, they can be rewarding in the end because of mandatory treble damages.
Of course, such lawsuits might be unnecessary if state regulators would be able to do a thorough, consistent job of shutting down illegal cannabis operators. In reality, however, many of the state agencies charged with policing cannabis are underfunded, understaffed or both. So in the current hybrid environment where illegal operators continue to receive support from landlords, media, product manufacturers, and even law enforcement officials, it should not be surprising at all that legal operators are pursuing new remedies.