Dykema Secures Federal Dismissal in High-Profile Michigan Cannabis RICO and Nuisance Case

Dykema successfully defended HiCloud LLC and its owner in a closely watched federal lawsuit challenging Michigan’s regulated cannabis industry. On December 9, U.S. District Judge Paul L. Maloney dismissed all federal RICO claims and declined to exercise jurisdiction over related state nuisance claims, removing HiCloud, its owner, and the Michigan Cannabis Regulatory Agency’s executive director from the case.

The Court held that private plaintiffs lack standing under the Racketeer Influenced and Corrupt Organizations Act to seek injunctive relief and further concluded that the plaintiffs fall outside the class of individuals the Controlled Substances Act was designed to protect. Judge Maloney also emphasized that novel and complex nuisance allegations tied to cannabis operations are best resolved by state courts applying state and local law—not through expansive federal theories. With the dismissal of the RICO claims, the court declined to retain supplemental jurisdiction over the remaining state-law nuisance claims.

Benjamin E. Bayram and Andrew P. Hussey of Dykema, along with Noah Harfouch of The Harfouch Law Firm PLLC, represented HiCloud and its owner. The decision reinforces the legal stability of Michigan’s state-licensed cannabis framework and provides important guidance limiting the use of federal RICO statutes to challenge lawful, regulated cannabis operations.