The Curaleaf subsidiaries that prevailed in a federal appeals court case involving a $31.8 million marijuana contract dispute say they are pleased with the outcome while emphasizing that they continue to support cannabis reform and legalization.
In a statement provided directly to The Marijuana Herald, the parties, represented by Andrianna D. Kastanek and Simon A. de Carvalho of Jenner & Block LLP and William B. Berndt of Steptoe LLP, said:
“Appellants respect the court of appeals’ careful consideration of this matter and are pleased with the outcome, which is consistent with the position we’ve maintained throughout this case. Nevertheless, Appellants continue to support cannabis reform and the continued progress of legalization.”
The statement comes one day after the U.S. Court of Appeals for the Sixth Circuit reversed a $31.8 million jury award to Michigan marijuana cultivation business Hello Farms Licensing MI. The defendants, GR Vending MI and CURA MI, are subsidiaries of Curaleaf Holdings.
The dispute stemmed from a November 2020 agreement under which GR Vending agreed to purchase marijuana produced by Hello Farms during its 2020 and 2021 harvests, with CURA MI serving as guarantor. After accepting an initial shipment of about 2,000 pounds, GR Vending declined additional deliveries as marijuana prices fell.
Hello Farms sued for breach of contract and ultimately secured a $31.8 million jury verdict.
In its September 10 ruling, the Sixth Circuit reversed the award, concluding that federal courts cannot enforce a contract requiring conduct prohibited under federal marijuana law.
“Federal courts can’t enforce contract claims founded on an agreement to purchase marijuana illegally,” the court concluded.
The appeals court also addressed the federal government’s move to place certain marijuana activity under Schedule III, finding that a change in marijuana’s federal scheduling status did not retroactively make the 2020 agreement enforceable.
The statement provided to The Marijuana Herald is notable because the Curaleaf parties prevailed by arguing that the contract was unenforceable under federal marijuana prohibition while at the same time making clear that they continue to support broader cannabis reform and legalization.
