NORML is backing an effort to reconsider a federal appeals court ruling that overturned a $31.8 million jury verdict won by Michigan cultivator Hello Farms against two Curaleaf subsidiaries.
According to October 18 reporting by The Marijuana Herald, the marijuana reform organization has submitted a brief supporting reconsideration of the Sixth Circuit’s decision. NORML argues that federal marijuana prohibition should not automatically prevent a business from recovering damages after another company breaches a cannabis supply agreement.
The dispute reaches beyond the money at stake between these companies. It concerns the legal protection available to businesses that grow and sell cannabis under state licenses but remain exposed to conflicting federal rules.
For growers committing an entire harvest to a buyer, the case puts the reliability of those purchase agreements under scrutiny.
The case began with a November 2020 agreement involving Hello Farms Licensing MI, GR Vending MI and CURA MI.
GR Vending agreed to purchase Hello Farms’ cannabis production from its 2020 and 2021 harvests. CURA MI guaranteed GR Vending’s obligations. Both buyers’ entities are subsidiaries of Curaleaf Holdings.
According to the appellate court’s account, the agreement anticipated a 2020 harvest of approximately 12,000 to 15,000 pounds. Hello Farms ultimately produced around 16,300 pounds, all of which passed the testing required by the contract.
GR Vending paid a $2.2 million deposit and accepted approximately 2,000 pounds. By January 2021, cannabis prices had fallen sharply, and the company stopped accepting additional deliveries.
Hello Farms sold the remaining 2020 crop to another buyer at lower prices. It also sold its larger 2021 harvest to that buyer for less than it would have received under the original agreement.
The grower sued to recover its losses.
Hello Farms initially filed its lawsuit in Michigan state court. The defendants moved the case into federal court under diversity jurisdiction, which allows certain disputes between parties with different state citizenship to proceed in the federal system.
The defendants argued that the supply agreement could not be enforced because it involved conduct prohibited by the federal Controlled Substances Act.
The district court rejected that defense, and a jury awarded Hello Farms $31.8 million. The Curaleaf subsidiaries appealed.
On September 10, 2026, the U.S. Court of Appeals for the Sixth Circuit reversed the decision. The panel concluded that federal courts could not enforce this agreement because the underlying marijuana transactions violated federal law.
The reversal turned on whether the agreement was enforceable in federal court. Having accepted the defendants’ federal illegality argument, the appeals court did not decide their separate challenge to whether the evidence supported the size of the jury award.
A central issue was whether a court could award financial compensation for the broken agreement without improperly enforcing federally prohibited conduct.
Hello Farms sought lost profits arising from GR Vending’s failure to purchase its harvests. The panel concluded that awarding those damages would still enforce the underlying cannabis bargain.
In its analysis of the decision, law firm Thompson Coburn explained that framing the claim as a request for money did not overcome the court’s objection. The damages depended on a purchase agreement the panel regarded as federally illegal.
The court also said the principle applied in either direction. A buyer seeking damages from a grower that refused to deliver marijuana would face the same underlying problem.
NORML’s intervention challenges the use of federal prohibition as a categorical barrier to recovering contract damages. Its position supports Hello Farms’ effort to have the court revisit that result.
Hello Farms’ medical cannabis status formed another part of the dispute.
The company held Michigan medical cultivation licenses when it entered the agreement. However, the majority concluded that the contract was not restricted to supplying the medical market.
Among the details it considered were requirements for recreational cannabis testing, GR Vending’s medical and recreational licenses, and Michigan rules allowing certain transfers between medical and recreational inventories.
The court also considered federal spending restrictions associated with the Rohrabacher-Farr Amendment. Those restrictions limit the Justice Department’s ability to use covered funds against qualifying state medical cannabis activity.
The panel concluded that those limits did not make the underlying transactions federally lawful.
As Ice Miller explained in its analysis, the court also rejected reliance on the April 2026 federal medical marijuana rescheduling rule. It found that the rule did not retroactively validate the 2020 agreement. The panel further noted that federal registration requirements remained relevant to whether medical marijuana transactions were lawful.
Hello Farms filed its rehearing petition on October 8, according to The Marijuana Herald. The grower warned that the decision could destabilize commercial relationships in regulated cannabis markets.
NORML’s supporting brief adds a national advocacy organization to that effort. Its argument focuses on whether federal illegality should automatically defeat a damages claim after a cannabis purchaser breaks its agreement.
The distinction between a filing and a court decision remains important. NORML’s brief supports reconsideration; it does not itself grant rehearing or restore the jury award.
The case remains identified as Hello Farms Licensing MI, LLC v. GR Vending MI, LLC, No. 25-1759.
The Sixth Circuit covers Michigan, Ohio, Kentucky and Tennessee. Its published decision binds federal courts within that circuit, while federal courts elsewhere can reach different conclusions.
The ruling also does not automatically invalidate every agreement involving a cannabis company. The nature of the transaction and the court hearing the dispute remain important.
For cultivators, the commercial concern is straightforward: a harvest agreement can shape planting decisions, production spending and expected income months before delivery. If recovering losses becomes uncertain after a buyer defaults, the grower’s exposure can extend well beyond the unsold flower.
That is a practical implication of the ruling, rather than a separate finding about every cannabis business.
Thompson Coburn’s analysis identifies payment structures, forum selection and arbitration as issues businesses may need to examine. It also cautions that arbitration cannot eliminate every enforcement risk if an award eventually reaches federal court.
After the September ruling, the Curaleaf subsidiaries told The Marijuana Herald that they were pleased with the outcome and believed it matched the position they had maintained during the litigation.
In the same statement reported September 11, they said they continued to support cannabis reform and further legalization.
Their legal victory illustrates the continuing consequences of the divide between state licensing and federal authorization. A transaction can operate within a state’s cannabis framework while encountering a different answer when enforcement reaches federal court.
The next question in Hello Farms’ effort is whether the appeals court agrees to reconsider its decision. For licensed growers following the case, the stakes include the ability to rely on a signed harvest contract when market prices move against the buyer.
Sources
According to October 18 reporting by The Marijuana Herald, the marijuana reform organization has submitted a brief supporting reconsideration of the Sixth Circuit’s decision. NORML argues that federal marijuana prohibition should not automatically prevent a business from recovering damages after another company breaches a cannabis supply agreement.
The dispute reaches beyond the money at stake between these companies. It concerns the legal protection available to businesses that grow and sell cannabis under state licenses but remain exposed to conflicting federal rules.
For growers committing an entire harvest to a buyer, the case puts the reliability of those purchase agreements under scrutiny.
The Harvest Agreement Behind the Lawsuit
The case began with a November 2020 agreement involving Hello Farms Licensing MI, GR Vending MI and CURA MI.
GR Vending agreed to purchase Hello Farms’ cannabis production from its 2020 and 2021 harvests. CURA MI guaranteed GR Vending’s obligations. Both buyers’ entities are subsidiaries of Curaleaf Holdings.
According to the appellate court’s account, the agreement anticipated a 2020 harvest of approximately 12,000 to 15,000 pounds. Hello Farms ultimately produced around 16,300 pounds, all of which passed the testing required by the contract.
GR Vending paid a $2.2 million deposit and accepted approximately 2,000 pounds. By January 2021, cannabis prices had fallen sharply, and the company stopped accepting additional deliveries.
Hello Farms sold the remaining 2020 crop to another buyer at lower prices. It also sold its larger 2021 harvest to that buyer for less than it would have received under the original agreement.
The grower sued to recover its losses.
A Jury Award Followed by an Appellate Reversal
Hello Farms initially filed its lawsuit in Michigan state court. The defendants moved the case into federal court under diversity jurisdiction, which allows certain disputes between parties with different state citizenship to proceed in the federal system.
The defendants argued that the supply agreement could not be enforced because it involved conduct prohibited by the federal Controlled Substances Act.
The district court rejected that defense, and a jury awarded Hello Farms $31.8 million. The Curaleaf subsidiaries appealed.
On September 10, 2026, the U.S. Court of Appeals for the Sixth Circuit reversed the decision. The panel concluded that federal courts could not enforce this agreement because the underlying marijuana transactions violated federal law.
The reversal turned on whether the agreement was enforceable in federal court. Having accepted the defendants’ federal illegality argument, the appeals court did not decide their separate challenge to whether the evidence supported the size of the jury award.
Why Seeking Money Did Not Resolve the Problem
A central issue was whether a court could award financial compensation for the broken agreement without improperly enforcing federally prohibited conduct.
Hello Farms sought lost profits arising from GR Vending’s failure to purchase its harvests. The panel concluded that awarding those damages would still enforce the underlying cannabis bargain.
In its analysis of the decision, law firm Thompson Coburn explained that framing the claim as a request for money did not overcome the court’s objection. The damages depended on a purchase agreement the panel regarded as federally illegal.
The court also said the principle applied in either direction. A buyer seeking damages from a grower that refused to deliver marijuana would face the same underlying problem.
NORML’s intervention challenges the use of federal prohibition as a categorical barrier to recovering contract damages. Its position supports Hello Farms’ effort to have the court revisit that result.
Medical Cannabis Protections Did Not Save the Agreement
Hello Farms’ medical cannabis status formed another part of the dispute.
The company held Michigan medical cultivation licenses when it entered the agreement. However, the majority concluded that the contract was not restricted to supplying the medical market.
Among the details it considered were requirements for recreational cannabis testing, GR Vending’s medical and recreational licenses, and Michigan rules allowing certain transfers between medical and recreational inventories.
The court also considered federal spending restrictions associated with the Rohrabacher-Farr Amendment. Those restrictions limit the Justice Department’s ability to use covered funds against qualifying state medical cannabis activity.
The panel concluded that those limits did not make the underlying transactions federally lawful.
As Ice Miller explained in its analysis, the court also rejected reliance on the April 2026 federal medical marijuana rescheduling rule. It found that the rule did not retroactively validate the 2020 agreement. The panel further noted that federal registration requirements remained relevant to whether medical marijuana transactions were lawful.
What NORML Is Asking the Court to Reconsider
Hello Farms filed its rehearing petition on October 8, according to The Marijuana Herald. The grower warned that the decision could destabilize commercial relationships in regulated cannabis markets.
NORML’s supporting brief adds a national advocacy organization to that effort. Its argument focuses on whether federal illegality should automatically defeat a damages claim after a cannabis purchaser breaks its agreement.
The distinction between a filing and a court decision remains important. NORML’s brief supports reconsideration; it does not itself grant rehearing or restore the jury award.
The case remains identified as Hello Farms Licensing MI, LLC v. GR Vending MI, LLC, No. 25-1759.
Why the Dispute Matters to Other Growers
The Sixth Circuit covers Michigan, Ohio, Kentucky and Tennessee. Its published decision binds federal courts within that circuit, while federal courts elsewhere can reach different conclusions.
The ruling also does not automatically invalidate every agreement involving a cannabis company. The nature of the transaction and the court hearing the dispute remain important.
For cultivators, the commercial concern is straightforward: a harvest agreement can shape planting decisions, production spending and expected income months before delivery. If recovering losses becomes uncertain after a buyer defaults, the grower’s exposure can extend well beyond the unsold flower.
That is a practical implication of the ruling, rather than a separate finding about every cannabis business.
Thompson Coburn’s analysis identifies payment structures, forum selection and arbitration as issues businesses may need to examine. It also cautions that arbitration cannot eliminate every enforcement risk if an award eventually reaches federal court.
The Curaleaf Subsidiaries’ Response
After the September ruling, the Curaleaf subsidiaries told The Marijuana Herald that they were pleased with the outcome and believed it matched the position they had maintained during the litigation.
In the same statement reported September 11, they said they continued to support cannabis reform and further legalization.
Their legal victory illustrates the continuing consequences of the divide between state licensing and federal authorization. A transaction can operate within a state’s cannabis framework while encountering a different answer when enforcement reaches federal court.
The next question in Hello Farms’ effort is whether the appeals court agrees to reconsider its decision. For licensed growers following the case, the stakes include the ability to rely on a signed harvest contract when market prices move against the buyer.
Sources
