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Finally, in trying to navigate a middle ground by applying the doctrine of severability, the court injected itself in the middle of difficult process of trying to decide on a case-by-case basis as to which contractual provisions are illegal and which are not in cannabis contracts. For example, the Bart Street court’s findings that purchasing land for cultivation of cannabis was a legal provision under the contract while providing operating capital was an illegal provision seems arbitrary at best and indefensible at worst.11 The defendants expressly used land for growing cannabis while operating capital could be used for any number of reasons not directly tied to cannabis. Trying to make provision-by-provision decisions provides no little to no guidance for future contracting parties on how they can create “legal” provisions distinct from “illegal” provisions regarding cannabis manufacturing and distribution.
Nevertheless, all is not lost, as several federal courts in other jurisdictions have come down far more favorably to recreational cannabis than the Bart Street court in rejecting the illegal contract defense. For example, in Green Earth Wellness Center, LLC v. Atain Specialty Insurance Company, the United States District Court for the District of Colorado directly addressed the fundamental tension between state and federal law when it noted that, while there is a “nominal federal prohibition against possession of marijuana,” the federal government has not enforced the Controlled Substances Act “where a person or entity’s possession and distribution of marijuana was consistent with well-regulated state law.”12 In declining to find a commercial insurance contract unenforceable due to illegality after fires destroyed a retail cannabis business, the Green Earth court cited “several additional years evidencing a continued erosion of any clear and consistent federal public policy” in the area of state-approved recreational cannabis operations.13
11 See id, 12 163 F. Supp. 3d 821, 833 (D. Colo. Feb. 17, 2016), 13 Id. at 835.
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