Performance Under Cannabis Contracts During a Pandemic: Do the Contracting Parties Stay Best Buds or Does One Party End Up Feeling Burnt?

The COVID-19 pandemic has wreaked havoc on nearly every industry in the global economy. The nascent and volatile cannabis industry was not exempt and, in some jurisdictions, has been impacted significantly due to local or state shelter or stay-at home orders. In most states where adult-use cannabis is legal, local and state governments have deemed cannabis businesses as essential and, thus, are permitted to continue operating notwithstanding local or state shelter orders. However, despite their characterization as essential businesses, many limitations imposed by local or state shelter orders have greatly affected the way cannabis businesses operate. As a result, cannabis businesses have experienced steep declines in their revenues and, in some instances, have left cannabis businesses unable to perform contractual obligations that they entered into pre-pandemic.

To read the full text of this article by Duane Morris partner Tracy Gallegos, please visit the Cannabis Business Executive website.