Members of the NORML Legal Committee, led by attorney William Swor of Detroit, Michigan, have filed a friend-of-the-court 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. The case at issue is Hello Farms Licensing MI, LLC v. GR Vending MI, LLC.
The brief is available in the NORML Legal Brief Bank.
The Appeals Court ruled in September that federal courts cannot award breach-of-contract damages in situations that enforce an agreement specific to conduct prohibited by the US Controlled Substances Act. NORML argues that if the ruling stands, it effectively allows cannabis businesses to breach their contracts with impunity.
NORML frames its interest as protecting consumers rather than companies. “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.”
The brief argues that a regulated cannabis market requires settled, predictable rules on which market participants can rely, and meaningful remedies when contractual obligations are breached. It warns that 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 brief explains. It adds that the panel’s categorical rule removes a central means of holding businesses accountable.
NORML’s amicus brief asks the Sixth Circuit to rehear the case. “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 brief concludes.
The request means the same panel of judges could reconsider its September decision, or the full court could take the case en banc.
The underlying dispute involves two Michigan cannabis businesses, Hello Farms Licensing MI, LLC and GR Vending MI, LLC. The September ruling held that federal courts cannot award damages for breach of contracts tied to conduct prohibited by the Controlled Substances Act.
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