DEFINING TERMS IN HEMP AND CANNABIS CONTRACTS 101

It’s critical that all parties are on the same page when it comes to the terminology used in any contract. Definitions are particularly important in hemp and cannabis contracts, however. Think about it: if there’s a contract dispute over the interpretation of a term down the road, there’s a chance that the dispute may need to be litigated. If the dispute needs to be litigated, who will be the ultimate decision maker? Answer: A judge that probably knows little to nothing about hemp or cannabis. Take a step back when drafting a hemp or cannabis contract and write it so that it is can be understood by any reader regardless of their industry experience. For example, do not just simply put that “Company A shall purchase X amount of “CBD” from Company B.” Be sure to define what CBD is, whether it is hemp or cannabis derived, and the form it will be delivered in. A great place to look for ways to define terms in your contracts is your jurisdiction’s regulations.

DISCLAIMER: THIS INFORMATION IS STRICTLY EDUCATIONAL AND DOES NOT CONSTITUTE LEGAL ADVICE.