Neighborhood dispute over Cambridge dispensary could upend Massachusetts' marijuana industry

A dispute between neighbors has the potential to derail Massachusetts’ entire marijuana industry.

Cambridge neighbors of the medical marijuana dispensary Healthy Pharms have sued the dispensary in federal court.

The neighbors, led by Crimson Galeria, argue that federal law, under which marijuana is illegal, should pre-empt state law, which allows it. They are using the RICO statute, a law crafted to address mob-related racketeering, to argue that Healthy Pharms and the businesses that support it are involved in illegal marijuana crimes, which are lowering neighborhood property values. If a judge agrees with their argument, Massachusetts could have to reconsider its medical and recreational marijuana programs.

“This case certainly has broad and far-reaching implications for the marijuana industry in general,” said Scott Schlager, lead counsel for Crimson Galeria and an attorney with Nathanson and Goldberg.

Emma Quinn-Judge, a partner at Zalkind, Duncan and Bernstein who represents Healthy Pharms, agreed that the consequences could be significant.

“It should be concerning to the citizens of Massachusetts that you could have a case in federal court that completely undermines something Massachusetts voters voted on repeatedly and various levels of state government have put a lot of work into figuring out,” Quinn-Judge said.

Healthy Pharms opened in late December in the high-rent Harvard Square neighborhood. It closed temporarily in February after a pesticide was found in its product, and it remains closed today while under investigation by the Department of Public Health.

Several commercial real estate businesses that own neighboring properties brought two lawsuits to keep Healthy Pharms out. The first is a zoning appeal, which is pending in state court. The second is the federal RICO suit filed in U.S. District Court in Massachusetts.

RICO, the Racketeer Influenced and Corrupt Organizations Act, is a federal law that provides increased penalties for crimes committed as

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