RICO Lawsuit Reaches Ancillary Businesses

On February 19, 2015, Safe Streets Alliance filed two lawsuits in the U.S. District Court for the District of Colorado in another effort to derail the state’s legal marijuana industry. The new twist in these suits is that they make use of the Racketeer Influenced and Corrupt Organizations Act, or RICO, to target defendants far removed from growing and selling marijuana. Whatever the ultimate fate of the legal actions, this is a troublesome development because these are the businesses with which investors have felt relatively secure.

The complaints are very similar, although the parties involved are somewhat different. In one, Safe Streets Alliance, a pro-law enforcement group, headquartered in Washington, D.C., is joined by Phillis and Michael Reilly, who own real property in Rye, Colorado. The principal target is Alternative Holistic Healing, LLC, which does business as Rocky Mountain Organics. In the other, Safe Streets Alliance is joined by New Vision Hotels, Inc.,...

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