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Contract Farming Leads to Disputes in California Marijuana Industry

While both medical and recreational marijuana is legal in California, legal disputes still arise. The “marijuana industry” now falls under the banner of a legitimate business operation. Not surprisingly, there are civil disputes that emerge among participants to contracts. When claims of breaches and other matters arise, a lawsuit could follow. And lawsuits are occurring in California regarding cannabis farming.

The central issue surrounds farmers employing “contract farming” methods. Contract farming is commonplace in the agricultural industry, but not in the marijuana industry. Supposedly, farmers opt for the contract farming method to address California regulatory barriers.

Contract farming, in a way, reflects a form of outsourcing. A farmer procures the necessary cultivation permits and then hires marijuana farmers to do the work. The parties split the proceeds from the crops.

Two well-known lawsuits arose out of disputes related to contract farming. One lawsuit focused on the contract farmers allegedly not receiving promised compensation. The second suit also alleged money remains owed for work performed.

The monetary amounts sought in both lawsuits is not small. The monetary amounts noted in the lawsuits are in the seven-figure range.

“Breach of contract” stands as the claim mentioned when discussing these suits. Breach of contract, generally, refers to one party not living up to an obligation. For example, if one party is promised a certain amount of money for work performed and the party is never paid, that could be a breach. Fraud and labor law violations are also mentioned in news reports about contract farming litigation.

Contract farming appears to be an option for “traditional” farmers looking to enter the lucrative marijuana cultivation market. The new world of legal marijuana is not free of civil or contract law disputes.

Persons involved in contract disputes might find contacting an attorney worthwhile. Doing so may be true regardless of the business sector involved.