NORML Urges Federal Appeals Court to Reconsider Ruling on Cannabis Contract Enforcement
NORML has called on the Sixth Circuit Court of Appeals to reconsider its decision that federal prohibition renders cannabis industry contracts unenforceable, citing risks to accountability and consumer protection in state-legal markets
Key Points
- 1NORML is seeking a rehearing from the Sixth Circuit on cannabis contract enforceability
- 2A $31.8 million jury award for Hello Farms was overturned due to federal marijuana prohibition
- 3NORML argues unenforceable contracts threaten consumer safety and accountability in legal state markets
- 4Curaleaf's CEO supports the current ruling as consistent with their position
- 5The case highlights ongoing conflict between state legalization and federal law
The National Organization for the Reform of Marijuana Laws (NORML) is pushing the U.S. Court of Appeals for the Sixth Circuit to revisit a recent decision that rendered cannabis industry contracts unenforceable under federal law. The case centers on a $31.8 million jury award initially granted to Michigan-based Hello Farms against subsidiaries of Curaleaf Holdings, which the court later overturned, citing the ongoing federal prohibition of marijuana despite its legality in Michigan
NORML has moved to file an amicus brief, arguing that the court's reliance on federal illegality undermines accountability in state-regulated cannabis markets. In its motion, NORML stated, “The panel’s categorical reliance on federal illegality to foreclose civil remedies threatens commercial accountability in lawful state-regulated cannabis markets and, ultimately, the medical patients and adult-use consumers those markets serve.”
The dispute originated when Curaleaf subsidiaries backed out of a purchase agreement with Hello Farms after market prices declined, leading to the initial jury award. However, the Sixth Circuit panel ruled that federal courts cannot enforce agreements related to federally prohibited activities, such as cannabis sales, even if they are legal at the state level
NORML’s amicus brief emphasizes broader public interests, noting that its aim is not to protect any single company’s profits but to “preserve the civil accountability on which consumers in state-regulated cannabis markets depend.” Joseph Bondy, NORML’s board chair, expressed concern that the current ruling “effectively allows cannabis businesses to breach their contracts with impunity, undermining the accountability, consumer access and safety protections on which state-regulated markets depend.”
Curaleaf’s Chairman and CEO, Boris Jordan, welcomed the court's decision, stating it was “consistent with the position we’ve maintained throughout” and reaffirmed the company’s commitment to supporting cannabis reform. As the legal landscape continues to evolve, NORML’s challenge highlights the tension between state legalization and federal prohibition, raising questions about the enforceability of business agreements in the cannabis sector. OG Lab notes that this case could set a national precedent, impacting both businesses and consumers in regulated markets as federal and state laws remain misaligned
