Written by A Michigan marijuana grower won a $31.8 million verdict after a buyer broke their supply agreement. On September 10, the Sixth Circuit reversed it. The court held that a federal court could not enforce an agreement whose performance required conduct prohibited by federal law, even though the business was licensed by the state.
Hello Farms Licensing MI, LLC v. GR Vending MI, LLC was a marijuana case. The court did not rule that hemp contracts are unenforceable.
Still, the decision matters in Tennessee, which is part of the Sixth Circuit. If pending federal changes cause a hemp product to fall outside the legal definition of hemp, businesses buying and selling that product could face questions about whether a federal court will enforce their agreements.
That risk belongs on the table when negotiating supply and distribution contracts now, particularly agreements that will continue beyond the upcoming federal changes. Businesses should know which products a contract covers, whether those products comply with federal law, and what happens if the law changes during the agreement.
A state license is important. As Hello Farms shows, it may not settle the federal contract question.
Harrington Beverage Law will continue watching what this ruling means for Tennessee’s hemp industry.
Last modified: October 9, 2026
