CANNAINVESTOR Magazine U.S. Privately Held April / May 2019 | Page 96

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25 See Doe 1 v. AOL LLC, 552 F.3d 1077, 1082 (9th Cir. 2009).

26 See, e.g., Takiff Properties Group Ltd. #2 v. GTI Life, Inc., 2018 WL 6990788, 2018 IL APP (1st) 171477, ΒΆ 31 (Dec. 26, 2018).

A. Forum Selection Clauses.

As discussed above, state courts in states that have legalized recreational cannabis are far more friendly to cannabis-related contracts than federal courts. Consequently, a forum selection clause can be inserted into cannabis-related contracts requiring matters to be litigated in state court rather than federal court.

In any event, the goal should be to choose a cannabis-friendly state court during the contracting process rather than risk a future dispute ending up in an unfriendly federal court.

A forum selection clause is one where the parties agree that any dispute arising from the contract will be heard by a specific court.25 Most typically this will be a court in the same state in which the parties executed the contract, but it could also include a cannabis-friendly state if one of the parties resided in that state or the state otherwise had some substantial interest in the contract.

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