Contact Stephanie Schuman,
Principal Counsel & Attorney-at-Law

Arbitration in the Industry


As cannabis businesses grow and the industry expands, business conflicts are inevitable: once-promising partnerships flounder, suppliers breach contracts, entities go bankrupt, and municipalities and agencies cancel licenses and permits. Legal disputes happen. But litigation through the court system can be protracted and expensive. That is why at Leaf Legal, P.C., we also represent clients in arbitration.


Arbitration is a form of alternative dispute resolution (ADR) designed to help the parties resolve disputes  faster and more efficiently than if they were to utilize the court system. But, similar to a courtroom decision handed down by a judge, the decision of the arbitrator is binding upon the parties. Whereas parties cannot choose a judge in the court system, they can select an arbitrator upon which they agree. This joint selection of a neutral third-party gives the parties the ability to seek out an arbitrator who possesses experience in their industry and thus better understand and decide decide upon your dispute.

Although two parties can elect arbitration, companies in the cannabis industry increasingly require arbitration pursuant to contracts, such as supplier agreements and even employment contracts, in which clauses state that the parties will enter into arbitration in the event a legal dispute arises.


As long as cannabis is a schedule one controlled substance, and thus federally illegal, arbitration is a wise choice since it keeps disputes in confidential arbitration rooms and out of court rooms. The courts appear to be divided with respect to enforceability contracts pertaining to marijuana or cannabis. Thus, cannabis companies whose disputes have been litigated, have had to deal with surprise decisions as a result of the argument that courts should not enforce a contract because the contract deals with substances still illegal under federal law.

Arbitration proceedings are often more flexible than courtroom proceedings. For example, the parties can choose an arbitrator who is willing to consider the parties' schedules when choosing hearing dates. An arbitration can be thought of as a scaled-down trial that is more affordable and more private than a courtroom trial. The matter is also confidential, ensuring that your business matters aren't open to the public.


Whether you need legal representation during mediation and arbitration or wish to incorporate alternative dispute resolution clauses into your corporate contracts and employment agreements, you need the advice of attorneys who know and understand the cannabis industry.

At Leaf Legal, P.C., our attorneys can provide representation and legal advice on all things cannabis. Let us help you focus on your business and leave the legal matters to Leaf Legal, P.C. Contact us online or call today at 212-933-9420 to request a free consultation and learn more. 

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