Businesses suing medical marijuana dispensaries over decreased property values

CAMBRIDGE, Mass. -- A Cambridge medical marijuana dispensary is being sued in federal civil court by its neighbors.

Harvard Square business owners say the facility is lowering property value by millions.

Healthy Pharms is a medical marijuana facility, but this federal case could set precedent for the recreational marijuana industry.

Crimson Galleria owner Raj Dhanda says ever since medical marijuana dispensary Healthy Pharms opened last December in Harvard Square, his property value has decreased by over $27 million and his tenants have been adversely impacted.

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"The property values in other parts of Harvard Square have gone up, but that's not true where I am because of the proximity of the marijuana dispensary," said Dhanda.

In the first-of-its-kind case in Massachusetts, Dhanda and other property owners are suing the dispensary and nearly a dozen others in federal court under the RICO statute, which coule triple the alleged damages to over $81 million.

Healthy Pharms Attorney Emma Quinn-Judge says there's no evidence that property values have been affected by her client and they are operating within state law.

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"It's also, I think, a real problem that a private person is potentially going to be in a position to take a position that is contrary to the will of the voters and contrary to what everyone has agreed. And to shut down not just my client, a broader business here in Massachusetts," said Quinn-Judge.

In addition to damages, the Cambridge Neighbors are claiming Healthy Pharms is violating federal law, and that supersedes state law. That case could have larger implications on the recreational marijuana industry, with pot shops set to open this summer.

"Federal law is the supreme law of the land and it is federal law that should govern," said Scott Schlager, attorney for Cambridge property owners.

"They're not only allegeding that my clients have injured the neighboring property values, but they're also asking the AG's Officer and the Department of Public Health to rescind all licenses for medical marijuana and stop issuing licenses," said Quinn-Judge.

A motion to dismiss this case has been filed in court and they are waiting to hear a judgment on that.

MORE: 'No such thing as medical marijuana,' Health Secretary says

Cox Media Group