Update below: When we previewed the announcement of new lawsuits targeted Colorado's pot laws (filed by Safe Streets Alliance, a Washington, D.C.-based group that misspelled "marajuana" in its press release), we noted that one of the challenges for the plaintiffs would be establishing standing in court — in other words, demonstrating that the state's legalization of limited recreational cannabis sales had caused injury.
To address this issue, the two SSA lawsuits (both on view below) were filed on behalf of others, with the first naming a pair of landowners who say a nearby grow has made riding horses on their property less pleasant, among other things, and the second listing owners of a hotel who say they've had a couple of cancellations due to a nearby business that isn't even operating yet.
The Safe Streets Alliance announcement of the suits, on the steps of the State Capitol, didn't exactly attract a throng. Aside from the media, the largest group of onlookers listening to attorney David Thompson argue that federal drug law supersedes regulations established by states represented organizations such as the Marijuana Policy Project, which had staged an earlier press event to decry the SSA efforts.
As for the lawsuits themselves, they're a curious pair of documents. The first names as plaintiffs the SSA and the married couple of Phillis Windy Hope Reilly and Michael P. Reilly — but it doesn't get around to talking about the pair's situation until page 25 of the document.
The Reillys own three lots in a development called the Meadows at Legacy Ranch — "approximately 105 acres of beautiful rolling pasture with sweeping mountain vistas that include views of Pike's Peak," the suit notes. And while they don't actually live on the land, they like to visit there on the weekends so that their kids can ride horses and hike.
A marijuana grow is adjacent to the Reillys' property, at 6480 Pickney Road — and that's a problem, the suit maintains, because "growing recreational marijuana is 'noxious, annoying or offensive activity' by virtually any definition because marijuana plants are highly odorous, and their offense smell travels long distances." Hence, the suit maintains that the grow violates assorted covenants governing Meadows at Legacy Ranch, thereby impinging on their ability to enjoy their land as they'd like.
On top of that, the site of a building under construction on the grow site "exacerbates the injury, for when the Reillys and their children visit the property, they are reminded of the racketeering enterprise next door every time they look to the west."
The suit also maintains that the grow has hurt property values — plus, "the large quantity of drugs at marijuana grows makes them targets for theft, and a prospective buyer of the
Reillys’ land would reasonably worry that the 6480 Pickney Road marijuana grow will increase crime in the area."
Note that this is all speculative. There's no documentation in the lawsuit to show that the Reillys or any of their neighbors have been victims of crimes as a result of the grow's proximity to their land or that the value of their property has plummeted as a result.
The second SSA suit names as a co-plaintiff New Vision Hotels Two, which owns the Holiday Inn in Frisco — and the gist of the complaint against the Medical Marijuana of the Rockies dispensary and grow, which has yet to open, isn't outlined until page eighteen.
The document points out that the shop will be located less than 75 yards from the hotel's front entrance before explaining why this is an issue:
Running a hotel in such close proximity to a recreational marijuana operation would be problematic under any circumstances, but New Vision’s injuries are especially acute because many of its guests are youth ski teams and families with children. The parents and coaches of the youth ski team members on whom New Vision relies for this important business are especially sensitive to the presence of recreational marijuana operations. Many parents and coaches will avoid booking with a hotel that is within a short walking distance and direct sight of a recreational marijuana store and grow facility.
The complaint adds that "booking agents for two high school ski teams that have stayed with New Vision each of the past several years have said that their teams will not return to the hotel this year due to Defendants' marijuana operations. Last year alone, those two teams were responsible for approximately $50,000 in revenue for the hotel."
Supposedly, "additional ski teams are likely to decide not to return after they learn of Defendants' nearby recreational marijuana operations," too.
There's no mention of the possible increased business the Holiday Inn has experienced due to tourists coming to Colorado from other states specifically because limited recreational marijuana sales are now legal here. Presumably, that would undermine the argument about damages.
Update: In the initial version of this post, we alluded to the comments of a legal expert. Now, that attorney in question, Thomas Walsh, has provided a detailed analysis of the lawsuits. Here's his take:
Anytime a national organization tries to bring a challenge to a state statute or constitutional amendment, standing is usually an issue. Here, the Safe Streets Alliance is hoping to overcome that hurdle through plaintiffs who are members of the organization but who reside or are located in the State of Colorado. Based on the allegations in each of the cases, the plaintiffs are likely to be challenged to establish actual damages.
That the complaints are long serves two purposes. First, with a RICO claim, the Plaintiff has to plead a facts with specificity in order to be able to establish that there was a conspiracy amongst such a wide range of state officials and private marijuana business owners. Second, it serves the organization's political aims in allowing t to educate the public on their position and publicity for their platform.
In the Reilly case, Plaintiffs Phillis and Michael Reilly own 105 acres of property in Rye, Colorado, adjacent to what will be a marijuana growing facility currently under construction by Alternative Holisitic Holding. In addition to Governor Hickenlooper and various state officials with the Department of Revenue and MED, the lawsuit names:
• The Pueblo County Commission
• The owner of the land upon which the grow facility will be built;
• The marijuana business, the construction company building the facility;
• The insurance company that issued Alternative Holistic's surety bond with the state MED;
• The owner of a company that will be transporting water to the marijuana grow facility.
They have done a good job of linking many of the different players who play a role in the licensing and operation of a marijuana business. But, there case falls apart in paragraph 74 of the complaint. The Reilly's damages allege that the construction of the marijuana grow facility "has already marred the mountain views from the Reillys' property line." The building is a "remind[er] of the racketeering enterprise next door."
The complaint also alleges that they expect that the facility will emit pungent odors and be a target for theft. The problem here for the Reillys and the Safe Streets initiative is that, other than possible damage to the Reillys' mountain views, the damages claimed are far too remote. Additionally, Plaintiffs' Prayer for Relief seeks remedies that are not targeted at their specific situation, rather they seek to unravel the entire state marijuana framework.
In the New Vision complaint, the plaintiff is New Vision Hotels Two, LLC, a company that owns the Holiday Inn in Frisco. Here, the Plaintiff is seeking damages related to the operation of a marijuana dispensary that will open across a shared parking lot from the Holiday Inn. The hotel claims that family ski groups will refuse to make reservations at the Holiday Inn if a dispensary is located 75 yards away from the hotel.
The Plaintiffs complaint states that two high school ski teams have stated that they would not book rooms with the Holiday Inn due to the proximity of the marijuana business. As with the Reilly complaint, the New Vision complaint also raises the concerns that marijuana businesses are "unseemly establishments that are only found in dangerous neighborhoods" and that they attract crime. While that may have been the case in the past, Safe Streets and its Washington, D.C.-based attorneys clearly have not visited Colorado in the last few years.
Notable about the Defendants in the New Vision case is that the Plaintiff names the owner of the property (likely it's own landlord), the accountant for Summit Marijuana, and Bank of the West — whom it alleges is Summit Marijuana's bank.
The lawsuits are intimidating if you are a marijuana business owner or a company that services marijuana businesses. This lawsuit may cause a chilling effect on the willingness of service providers, especially banks, to serve marijuana businesses.
Look below to see both documents in their entiretly.Send your story tips to the author, Michael Roberts.
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