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Kentucky hemp business dispute underscores importance of comprehensive contracting

by | Jun 2, 2021 | Regulatory Work |

At our law firm, we represent Kentucky businesses and their owners as well as entrepreneurs and out-of-state entities doing business in Kentucky in a wide range of contract services. From negotiation with other parties to the creation of strong contracts that protect our clients’ interests, we strive to draft or review agreements that are airtight and comprehensive.

When our clients end up in business disputes involving contracts, we may attempt to negotiate a fair resolution or use mediation or arbitration to reach agreement, we do not hesitate to litigate contract disputes vigorously.

Kentucky lawsuit filed

In July 2020, two Kentucky-based businesses announced that they had reached an important biomass tolling agreement. GenCanna Acquisition Corp. of Winchester and Vertical Wellness of Cadiz reached a deal that GenCanna would provide over 10 million pounds of hemp biomass to Vertical Wellness for processing. GenCanna also agreed to share its industrial hemp drying technology to Vertical Wellness.

In their news release, they touted their hopes for a successful partnership based on this major agreement.

However, GenCanna has sued Vertical Wellness in federal court in Kentucky for breach of contract, according to HempIndustryDaily, which reports a dispute that developed when GenCanna requested that Vertical Wellness put its drying and processing on hold because of GenCanna’s reorganization in bankruptcy court and associated sale of most of its assets.

Vertical Wellness reportedly stopped these operations but resumed them without permission to comply with the agreement. Apparently, GenCanna says that Vertical Wellness would not agree to a contractual extension.

GenCanna reportedly terminated the contract when it filed the breach of contract action.


Without reviewing the complaint and contractual agreement or knowing what they contain, the dispute as reported raises some issues about the importance of comprehensive contracting generally:

  • Include dispute resolution provisions should disagreements arise such as negotiation, mediation or arbitration to avoid expensive litigation
  • Anticipate what issues might arise like bankruptcy or major sale of assets that could impact the ability to comply with the agreement and include contingencies for dealing with them
  • Include terms for how the parties might wind down the agreement prematurely should they agree to do so
  • And others

Be sure to consult an experienced contract attorney for business agreement drafting, reviewing, negotiating and if necessary, litigating.

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