Racketeering lawsuit heats up wine vs. weed war in Oregon

The rolling hills of northern Oregon produce some of the most prized wine in America. But there’s rivalry from a new neighbor: Cannabis farms. With grapes and buds competing for the same soil, messy legal battles have ensued.

A number of racketeering lawsuits taken by winemakers against pot growers have languished and failed in Oregon’s courts, with the grape-growers unable to prove that the pot plantations next door messed with their crops or cost them business. One such lawsuit, however, has managed to proceed, with a federal judge acknowledging an actual financial loss.

The owners of Momtazi Vineyard, in Oregon’s verdant Yamhill County, pride themselves on utilizing the earth beneath them to produce a superior product. “The farm is considered a living organism,” they write, and the Momtazi team avoids commercial fertilizers and pesticides, going as far as applying herbal teas “in homeopathic amounts” to their vines.

Neighbors Mary and Steven Wagner use this same soil to grow marijuana with their company Yamhill Naturals, an activity legal in Oregon since 2014.

The winery isn’t happy with its green-fingered neighbors, and a lawsuit filed against the Wagners earlier this year alleges that their pot farm has harmed Momtazi’s business. The suit, which was upheld by a federal judge late last month, states that a repeat customer had canceled a six-ton order of grapes, concerned that they had become tainted with the “notoriously pungent stench” of dope from next door. 

“A vineyard’s real property value is heavily dependent upon the marketability of the grapes grown on that vineyard property … and the marketability of the grapes grown [on] Momtazi property has declined,” the lawsuit read. 

The lawsuit was filed under the Racketeer Influenced and Corrupt Organization Act, or RICO, a federal act most notably used against drug cartels and mafia organizations. Though Oregonians are free to grow pot under that state’s laws, marijuana cultivation is still illegal under federal law. Hence, the judge allowed the case to proceed.

The squabble in Yamhill County is just one of a series of flashpoints that has emerged since US states began legalizing marijuana, as established businesses seek to stop the advance of the green giant. Legal pot needs to grow somewhere, but business owners and residents near plantations argue that its presence brings down their property values.

Half a dozen similar lawsuits have been filed in Oregon alone, though none of them have made it as far through the courts as Momtazi’s latest effort. Last year a homeowner took legal action against a pot processing plant that had moved in next door, suing the operation and more than 200 businesses that it worked with, again justifying the use of RICO legislation due to marijuana’s illegality under federal law.

The same strategy has been used to fight back in pot-friendly states like Colorado, Massachusetts and California, amid a wider pushback against pot growers. At a seminar for legal professionals last year, an anti-dope lawyer encouraged his audience not to turn their noses up at suing even small, “mom and pop” grow operations, as “their lawyers, their accountants, their financial advisers,” had “deep pockets” for lucrative payouts.

Back in Yamhill County, the beef between the Momtazis and the Wagners began long before the current lawsuit was filed. The Wagners told the New York Times in 2017 that their arrival in wine country was met with resistance from their neighbors. “This is hostile territory,” the Wagners’ son Richard told the Times. “Everyone hates us.”

The hate seemed to go both ways, though. After some national media coverage, the Momtazis reported getting threatening phone messages. At one point, winery owner Moe Momtazi found that someone had severed the tail of one of his cows, an act he saw as a direct threat from his neighbor’s supporters.

With the legal case still to be settled, the broader battle between Pinot Grigio and Pineapple Kush is also the talk of the wine industry. Wine connoisseurs swear on Oregonian Pinot Noir, but consumers are increasingly making the switch to cannabis as their intoxicant of choice.

At this year’s Wine & Weed Symposium in California this month, market analyst Jessica Lukas stated that, by 2024, legal pot will be a $40 billion industry worldwide, with the US accounting for 70 percent of that value. More and more adults are consuming cannabis in legal states, and these new tokers are reducing their alcohol intake. While she said that cannabis is “not yet” affecting wine sales, an industry publication wrote that next year’s symposium “may tell a different story.”

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