Can a cannabis contract be legal under state law but still unenforceable in federal court? That question is at the center of a recent Sixth Circuit decision with potentially far-reaching implications for cannabis businesses and the agreements that support them.
In their latest article published in New Jersey Law Journal, Ryan Magee and Kieran Ensor examine the Sixth Circuit’s decision in Hello Farms Licensing MI v. GR Vending MI, which overturned a $31.8 million jury verdict after finding that the underlying cannabis supply agreement was unenforceable because it required conduct prohibited by federal law.
Ryan and Kieran explore the court’s distinction between contracts containing incidental unlawful provisions and agreements whose fundamental bargain is itself illegal. They also discuss the broader implications for contract enforcement, dispute resolution, and risk management across the cannabis industry.