Marijuana Business Magazine November December 2018

For those who find themselves named in a RICO suit, Walker offered these recommendations: • Be sure to get proper legal advice. Seek out an attorney experi- enced in litigation. • Don’t act out of emo- tion. Instead, make decisions that best protect yourself and your company. • Consider working with the other defend- ants to pool resources and reduce your legal costs. Walker said he talked with a marijuana operator in Colorado who was told by an attorney that legal costs would run about $125,000 to see a RICO case through.Weighing the potential cost, the defendant in that case decided to settle with the plaintiff instead. But Walker doesn’t want to settle. “I view it as a pretty obvious attempt at a shakedown,” he said. “I don’t think it’s too cynical to suggest that reaching a settlement is their intended outcome. We have a gray area between state and fed- eral law, and they’re exploit- ing it for monetary gain.” Under the provisions of RICO, plaintiffs also can name “co-conspirators,” such as landlords, property owners, mortgage companies, consultants – even customers. Walker said 200 individuals and businesses have been listed as defendants in his case – including his customers, who make cannabis-infused products from his marijuana. “It’s a pretty big swing, and we’re hoping that proves to be a mistake,” Walker said of the wide swath of defendants listed in the lawsuit. Walker hopes he not only wins the case, but that he and his fellow defendants are able to “claw back some of their legal fees.” McCart, the attorney and plaintiff in Walker’s case, didn’t return phone calls or emails seeking comment. Walker said he is heartened that the RICO claim in one of McCart’s other cases in Oregon was dismissed in August, when a federal judge ruled that the plaintiffs had failed to show a concrete financial loss. Encouraging Signs Michael Mayes, CEO of Chicago- based cannabis consultancy Quantum 9, noted: “If you can’t prove damages – that is, property value decreasing – then it is hard for the cases to hold weight.” Mikos, the Vanderbilt law professor, agreed the ruling “suggests that liability is more limited than originally thought.” Still, the only thing likely to eradicate the lawsuits is federal marijuana reform that makes state-legal programs also legal under federal law. “You might still have some lingering suits because of actions taken before federal marijuana reform,” Mikos said. But if state-legal marijuana programs are legal under federal law, he said, “then they can’t form the basis for a federal RICO suit.” ◆ Michael Mayes, CEO of Quantum 9, says plaintiffs must be able to prove cannabis businesses have depressed property values. Photo courtesy of Quantum 9 Mason Walker, owner of East Fork Cultivars in Oregon, was named as a defendant in a RICO lawsuit in July. Photo by Kim Nguyen | East Fork Cultivars 108 • Marijuana Business Magazine • November/December 2018