Well, it looks like cannabis RICO lawsuits are not going to happen any time soon. As an update to this post I wrote in 2020, the Ninth Circuit has just affirmed the dismissal of two RICO claims brought by a cannabis business owner.
Background of Shulman v. Kaplan
As a quick recap, Plaintiff Francine Shulman took advantage when recreational marijuana was legalized in California and started a cannabis cultivation operation. At some point, she needed financial back and guidance, so she partnered with Defendant Todd Kaplan. They and their various business entities entered into agreements, which Shulman ultimately claims were used to defraud her out of her assets and licenses.
Shulman filed a lawsuit in the Central District of California, a federal court, because two claims involved violations of RICO and two other claims involved violations of the Lanham Act (both federal statutes). RICO, or the Racketeer Influenced and Corrupt Organizations Act of 1970, is a federal statute that provides for a civil cause of action for acts performed as part of an ongoing criminal organization (in addition to criminal penalties). We’ve written a ton of posts about RICO, but suffice it to say, it allows plaintiffs claiming a loss