Cannabis And The Federal Courts

All participants within the cannabis industry should understand the potential risks of litigating disputes in the federal courts. Federal policy regarding enforcement of the Controlled Substances Act (CSA) has shown ambivalence where the possession and distribution of marijuana is consistent with well-regulated state law. The federal courts, however, have taken a nuanced but strict position with respect to enforcement of cannabis-related contracts and other rights by evaluating whether doing so would require the litigant to actively violate the CSA. For example, various federal courts have enforced cannabis-related rights pertaining to insurance, federal labor and employment statutes, certain federal intellectual property protections, and contracts around ancillary products and services. In those cases, the courts determined that enforcement of the contract or right would not result in the litigant directly profiting from the possession, cultivation or distribution of