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Why Is Arbitration Ideal for Resolving Cannabis Industry Disputes?

Why Is Arbitration Ideal for Resolving Cannabis Industry Disputes?

Why Is Arbitration Ideal_675

Topics to be Included:

Speed (AAA to provide stats on case disposition) 

•  Cannabis plants lose value when it sits

•  Limited Discovery v Courts 

•  Emergency Relief (R-38 Interim Measures and R-39 Emergency Measures of Protection) 


•  Maintain Trade Secrets, IP, and Proprietary Business Information/Practices

•  Preserve Business Relationships

Subject-Matter Expertise

•  Judges and Juries typically lack familiarity with industry practices

•  Judges and Juries may have biases against the industry 

Access to Justice 

•  State Courts are Accessible

•  Restricted Accessibility to Federal Courts including Bankruptcy Courts

What types of agreements can arbitration clauses be incorporated in? 

•  Partnership/Joint Venture Agreements

•  Product Wholesale Agreement

•  IP/Licensing Agreements

•  Equipment Leases

•  Manufacturing Agreements

•  Extraction/Infusion Agreements

•  Security Agreements

•  Consultant Agreements 

•  Construction and Real Estate Agreements 

•  Employment Promulgated Plans and Executive Contracts 

What are some of the challenges that arbitrators have seen when arbitrating Cannabis disputes? 

•  Conflicting contracts

•  Course of conduct 

•  Conflicting arbitration clauses

•  Proper Parties 

•  Arbitration Clauses that provide for full discovery and application of FRCP

•  Counsel that lack experience with arbitration 

•  Fulfilling Mediation as a Condition Precedent 

What are some of the tips for drafting arbitration clauses for Cannabis disputes?

•  Overview of the Standard Arbitration Clause 

•  Arbitral Administrator and Rules 

•  Mediation 

•  Choice of Law and Hearing Locale

•  Arbitrator Qualifications and Number of Arbitrators (point out challenges with party-appointed arbitrator selection) 

•  Discovery

•  Confidentiality

•  Duration (3 mos. provisions are typical but rare for parties to be at the ready—realistic time frame is 4-6 months)

•  Document Retention 

•  Scope of arbitrator’s remedies for relief (limitation of damages that are awardable) 

•  Form of Award 

•  Attorney’s Fees and Costs 

•  Arbitration Appeal 


Lance Tananka, Vice President, AAA-ICDR


Kyle-Beth Hilfer, Hilfer Law

Gary Michael Smith, Founding Member, Guidant Law

Tom Downey, Arbitration Panelist of the American Arbitration Association; Board Chair of the Coalition for Cannabis Policy, Education, and Regulation (CPEAR)

Section Member Price: $40.00 Join (or renew) for special member pricing
Non-Member Price: $100.00
Published Date:
  • September 13, 2023
  • Online On-Demand
Product Code:
  • VND11
Areas Of Professional Practice Credit(s):
  • 1.5
Total Credit(s):
  • 1.5