June 8, 2017
A ruling issued on June 7th by the US Court of Appeals for the Tenth Circuit, in response to a series of legal challenges to Colorado’s adult cannabis use regulations, includes both good news and bad news.
The Good News
Most importantly for the legalization movement nationwide, the appeals court rejected the argument raised by the states of Nebraska and Oklahoma that Amendment 64 in Colorado, the voter initiative that legalized and regulated the adult use of marijuana, was preempted by the federal Controlled Substances Act. That argument, made by these neighboring states, if accepted by the court, would have voided Amendment 64.
It should be noted that this was not a definitive ruling on the federal preemption argument. Rather, it was a procedural ruling, finding that only the US Supreme Court has jurisdiction to hear disputes between the states. (The Supreme Court declined to consider a similar challenge in 2016.)
In fact, it was only after the Supreme Court had rejected their motion that the two states elected to raise these same issues with the 10th Circuit, by filing a motion to intervene in the Safe Streets case.
Also a big win, the Circuit Court rejected a similar attempt by a group of sheriffs and prosecutors from Colorado, Kansas, and Nebraska to use the US Controlled Substances Act and the Supremacy Clause of the US Constitution to enjoin the enforcement of Amendment 64. The court found that the Supremacy Clause “does not give rise to a private right of action.”
Hopefully this will give pause to other anti-marijuana zealots out there who might wish to use the federal preemption argument to undermine the various state legalization laws.
The Bad News
The bad news is that the 10th Circuit did reinstate a civil RICO complaint filed by private landowners in Colorado against a state-licensed indoor cultivation center, alleging it had caused a noxious odor that damaged their property value. The appellate court remanded the case back to the US District Court for further proceedings to allow the plaintiffs to attempt to prove their RICO claims.
While this is necessarily concerning to those in the state-legal cultivation industry, since the problems presented by the odors emanating from large grow operations is a theme which has been raised in several Colorado communities, it likely does not open the floodgates for every neighbor to bring a RICO suit against any cultivation center. Rather it likely will accelerate the adoption of the most effective technology by cultivation centers to minimize the odor of marijuana.
In the court’s own words, “We are not suggesting that every private citizen purportedly aggrieved by another person, a group, or an enterprise that is manufacturing, distributing, selling, or using marijuana may pursue a claim under RICO. Nor are we implying that every person tangentially injured in his business or property by such activities has a viable RICO claim. Rather, we hold only that the Reillys alleged sufficient facts to plausibly establish the requisite elements of their claims against the Marijuana Growers here.”