© 2019 by Herrick & Herrick, pc

E-mail: info@herrick.org

Phone: +1-650-776-6987

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CONTRACTS & AGREEMENTS

Whether you are in the THC, CBD or Hemp business we cannot emphasize enough the importance of having a lawyer review your contracts, whether they are using a purchasing agreement, consulting agreement, brokering agreements, leasing agreements etc. You need to have an attorney review them.  So many people think that they can use form contracts and they will suffice.  This is dangerous in any area of the law, because most non-attorneys are just not trained to see the traps and dangers of using poorly drafted contracts. This rule is ESPECIALLY important in the Hemp, CBD and THC world.  From the links below you can learn how poor contract drafting can lead to serious headaches and often irrevocable tragedy.

MOST AGREEMENT IN THE CANNABIS ARENA ARE UNENFORCEABLE

Most contracts drafted for any sort of agreement involving THC, CBD, or Hemp is either partially or completely unenforceable.  One example is that many local jurisdictions consider Hemp or CBD and especially THC as illegal substances.  If the contract is written where the controlling law is a jurisdiction where Hemp, CBD or THC is considered illegal, the whole contract can be thrown out.  You cannot draft a contract for an illegal product.  For example, a contract for the purchase of cocaine is not enforceable anywhere in the United States.  In many states a contract for THC is unenforceable (and at the Federal level) it is always unenforceable.  This also holds true for states.  Some states say CBD can be used for topical use and some states say it can’t be used for topical use.  Some states say CBD can be used for smoking and some say it can’t be used for smoking. And again, depending on the state, oral ingestion

INTERSTATE COMMERCE

Interstate CBD contracts are very tricky because you sign the contract in a CBD state but according to the contract the laws of the state of South Dakota (Where CBD is completely illegal) apply and accordingly you can’t enforce. 

CON MEN, BAD ACTORS AND CRIMINALS

Many bad actors in the Cannabis Industry know that it is very easy to draft an unenforceable CBD,THC or Hemp Agreement.  They will send you a contract that they know is unenforceable so they can blow you off later if they get a better offer. 

This tactic is very common when someone pays a farmer to grow hemp for them.  The farmer finds a better offer, keeps the money you paid him or her and sells your hemp to someone else.  And the contract you used was unenforceable.   We have been doing contracts for over twenty five years and contracts are our special expertise.  This goes double for Hemp, THC and CBD contracts. 

HEMP COMMODITIES CONTRACTS

Many of our clients have entered the newly legal Hemp industry over the past year. Hemp presents many new and unexpected challenges for small businessmen and entrepreneurs.  Selling, buying and brokering hemp is an industry still in its infancy and therefore there are scores of unscrupulous players in this arena.  Having strong and enforceable purchase, broker, escrow, non-disclosure agreements etc. is essential if one wants to see any profits in the booming hemp market.

POORLY DRAFTED AGREEMENTS CAN AND DO DESTROY BUSINESSES

Do not create a written agreement that involves Hemp, CBD or THC without either contacting this firm or another firm to review the Agreement.  In my experience, poorly drafted contracts cause the most cannabis business failures.  Business owners sign an agreement that is unenforceable, they depend on the agreement for the functioning of their business, and when the other sides doesn’t perform (they don’t deliver the products they were supposed to deliver, don’t pay the money they promised to pay, they don’t provide the license they promised, or the land they promised), the damage is so sever the person on the other end of the agreement goes under and they find they can’t even sue to enforce the Agreement.

 

IN THE FINAL ANALYSIS YOU SHOULD AT LEAST TAKE THESE STEPS:

In the Hemp, CBD and THC business put everything in writing.  And make sure that whatever agreements are written can be enforced!

If you are contemplating entering into an agreement in the Hemp, CBD or THC world call us today!