$31.8M Contract Payout Overturned

The Sixth Circuit Court of Appeals overturned a $31.8 million jury verdict awarded to Michigan grower Hello Farms Licensing MI against GR Vending MI and CURA MI, both Curaleaf subsidiaries.

The dispute came from a 2020 output agreement. GR Vending agreed to purchase Hello Farms’ 2020 and 2021 harvests, accepted roughly 2,000 pounds, then stopped taking deliveries as Michigan wholesale prices collapsed. Hello Farms sold the remaining material elsewhere at lower prices and ultimately won $31.8 million for breach of contract in federal district court.

On September 10, the Sixth Circuit erased that judgment.

The court held that federal courts cannot enforce a contract whose performance required activity prohibited by the Controlled Substances Act—even when the transaction was permitted under Michigan law.

That is the important part.

Deeper context: Schedule III didn’t save the contract

The court directly addressed the April 2026 federal change placing qualifying state-licensed medical products into Schedule III.

It said two things.

First, a contract that was federally illegal when signed does not normally become enforceable because the law changes later.

Second, even a similar medical transaction executed today would still require proper DEA registration. Schedule III did not simply make every state-licensed transaction federally lawful.

The court also rejected reliance on the long-running Rohrabacher-Farr appropriations rider. That rider restricts DOJ spending on certain prosecutions involving compliant state medical programs; it does not legalize the underlying conduct or require federal courts to enforce private contracts.

And here is the uncomfortable bit: Curaleaf’s subsidiaries won by arguing that the agreement they signed was federally illegal.

Not elegant. Effective.