SCOTUS expands RICO liability: What hemp product manufacturers need to know

A recent ruling from the U.S. Supreme Court has expanded the ability of plaintiffs to sue under the Racketeering Influenced and Corrupt Organizations Act (RICO). In the case Medical Marijuana Inc. v. Horn, the Supreme Court determined that a trucker could bring a claim against a CBD company under RICO for misrepresenting that a product was “THC-free” after the trucker tested positive for THC in an employer drug test. Historically, lawsuits under RICO relied on proof of economic or property harm, and this ruling opens the door for plaintiffs to sue under RICO for personal injury.

SCOTUS’ decision in this case highlights the importance of strong business practices for hemp product manufacturers. In light of the possibility of being sued under RICO, hemp product manufacturers must closely evaluate their supply chain partners, testing practices, and product claims (including those made online and on product labels) to reduce risk to their businesses.

McDonald Hopkins’ Cannabis and Psychedelics Practice group is a leader in providing actionable strategic and legal advice to hemp product firms across the U.S. Our team is standing by to assist hemp product companies in refining existing business practices to ensure ongoing compliance with the ever-changing landscape of laws and regulations that impact their businesses. Reach out to our practice chair, Kevin Washburn to learn more.

Xavier Jaillet, a law clerk at McDonald Hopkins, assisted with the writing of this article.