Tenth Circuit issues major decision on marijuana industry

On Wednesday the Tenth Circuit issued a mixed-bag opinion for the burgeoning marijuana industry.

Beginning with bad news for the industry: the decision in Safe Streets Alliance v. Hickenlooper struck a blow in holding that a landowner adjacent to a state licensed marijuana grow operation had a plausible claim under the federal Racketeer Influenced and Corrupt Practices Act (“RICO”).

The court noted that “stench” from the grow could be a qualifying injury under RICO. While the court stopped short of finding that noxious odors from the grow operation would satisfy RICO in this case, the court remanded the matter for additional findings.

The decision does not foreclose a win for the industry on the merits, but the opinion opens the door for other landowners to file similar claims anywhere a person can smell a grow. The impact may ultimately fall more heavily on operators in more populated areas with more noses.

The industry’s fortunes improved in the second half the opinion where the court vacated an order permitting Oklahoma and Nebraska to intervene in the case.

Both states had filed petitions with the United States Supreme Court to make Colorado enforce the Controlled Substances Act. However, when the Supreme Court declined to accept the case, Oklahoma and Nebraska sought to revive their claim in the appellate court.

In vacating the order, the Tenth Circuit relied on the unique posture of cases between sovereign states. The court cited federal law that vests the United States Supreme Court with jurisdiction in such cases, and only the Supreme Court.

The panel appreciated that declining jurisdiction would leave the two states with no apparent remedy: caught between a Supreme Court that declined to exercise jurisdiction, and an appellate court that had no jurisdiction. But the panel did offer a recommendation: appeal our decision back to the Supreme Court.

The composition of the Supreme Court has changed since the court declined to exercise jurisdiction, and the decision to decline the case occurred while the court was operating with eight members, when the justices were motivated to delay decisions on highly controversial issues.

The addition of Justice Gorsusch, who is from Colorado, might change that calculous: not only in the number of justices necessary to grant cert., but in the motivation of other justices to join in the grant now that we have a Supreme Court operating at full capacity.

If cert. was grant, the case would present the Supreme Court with an opportunity to affirm Colorado’s sovereignty or alternatively, further consolidate power in the federal government by permitting states to interfere in the exercise of their own sovereignty.