How the Smell of Marijuana Became a ‘Racketeering’ Issue That Threatens the Industry

October 29, 2018, 12:18 PM UTC

Marijuana production is a smelly business—a fact that could have major repercussions for the industry, if a trial beginning Monday goes a certain way.

Hope and Michael Reilly, a couple owning land in Colorado, are suing the grow facility that’s been set up next door. They say the facility’s “pungent, foul odors” have knocked a substantial sum off the value of their property and hampered their ability to enjoy it.

In a sense, this suit—which has been gathering steam for three years now—suggests the marijuana industry faces similar woes to those of the pork-production industry, which is also being targeted over neighbor-unfriendliness. What’s particularly interesting about this case, however, is that it’s based on anti-racketeering law.

Last year, an appeals court said the Reillys could go ahead with their case based on the Racketeer Influenced and Corrupt Organizations (RICO) Act, which allows civil lawsuits against criminal enterprises for property damage.

Although recreational marijuana use and production is legal in Colorado and many other states, the legal situation remains different at the federal level. This creates serious problems for American weed businesses, which cannot transport their wares across state lines, and which have trouble handling their money through the financial system.

If the jury finds for the Reillys, those businesses could also find themselves targeted by a multitude of similar lawsuits.

According to the Associated Press, the offending neighbor, Parker Walton, has a 5,000-square-foot building in which he and a few employees produce marijuana for retailers. His lawyer, Matthew Buck, said he was confident that the jury will reject the Reillys’ arguments, but defending such cases is costly for small businesses.