Members of the NORML Legal Committee – led by attorney William Swor of Detroit, Michigan – have filed a friend-of-the-court (amicus) brief urging the US Court of Appeals for the Sixth Circuit to reconsider its decision that cannabis industry contracts are not enforceable as long as marijuana is federally prohibited.
Specifically, the Appeals Court ruled in September that federal courts cannot award breach-of-contract damages in situations that enforce an agreement specific to conduct that is prohibited by the US Controlled Substances Act.
NORML argues that the ruling, if allowed to stand, effectively allows cannabis businesses to breach their contracts with impunity.
“The interest of NORML here is not in protecting a particular company’s profits,” NORML’s brief states. “It is in preserving the civil accountability on which consumers in state-regulated cannabis markets depend.”
It continues: “A regulated cannabis market requires … settled, predictable rules on which market participants can rely, and meaningful remedies when contractual obligations are breached. Removing those remedies creates foreseeable risks for consumers. … Consumers depend on growers, distributors, and retailers to honor commitments that support reliable supply and product testing for safety. The panel’s categorical rule removes a central means of holding businesses accountable.”
NORML’s amicus brief concludes, “The Court should grant panel rehearing or rehearing en banc and reject the categorical rule that the CSA’s prohibition of marijuana, standing alone, forecloses the damages remedy sought here.”
The case is Hello Farms Licensing MI, LLC v. GR Vending MI, LLC. The amicus brief is available in the NORML Legal Brief Bank.