Utilizing alternative dispute resolution (ADR) to settle disputes out of court via arbitration and/or mediation is especially beneficial to the cannabis industry for several reasons:

• Access to justice: some Federal courts have declined to hear cannabis-related cases. 
• Time and cost: arbitration is faster and more cost effective than litigation, geared toward maintaining business relationships and getting companies back to business.
• Arbitrator selection: parties can select decision makers who do not possess bias against the industry.
• Confidentiality

Within the last five years, over 100 cannabis-related disputes were files with the AAA.

Types of Disputes

Disputes handled by the AAA arise from, among others:

• Operating agreements 
• Consulting agreements
• Management agreements
• Joint venture agreements 
• Purchase/sales agreements
• Cultivation agreements
• Breach of contract
• Separation agreements
• Profit-sharing agreements 
• Licensing agreements
• Shareholder settlement agreements
• Logistics, technology, and cooperation agreements
• Confidentiality/non-disclosure agreements

Time and Cost

AAA cases often are settled prior to the arbitrator’s decision—and nearly half of those cases incur no arbitrator compensation.

In 2020:

• The quickest time for an award was 6.3 months.
• The median time for an award was 12 months.

2020 Cannabis Claim

AAA Rules cover the spectrum of industries and fields. Well-defined steps move cases from filing to award as quickly and cost-effectively as possible, while ensuring that all parties are treated fairly and equitably. Cannabis cases typically utilize the following sets of rules: AAA Commercial Arbitration Rules, AAA Construction Arbitration Rules, and AAA Employment Arbitration Rules.

AAA Procedures for Large Commercial Disputes and AAA Procedures for Large Construction Disputes specially target these cases.

Panel members are seasoned arbitrators and mediators with expertise in commercial business, construction, employment, joint ventures, and disclosures/receiverships, among other specialties.

For information on how the AAA protects party and case security, click here.

For a fair, timely, cost-efficient dispute resolution process, it is essential to insert a well-written dispute resolution clause into the contract between the parties.

Parties can insert the AAA standard arbitration or mediation clause into their contract or can customize their clause with options that control for time and cost.

To learn how to add an effective clause to your ADR contracts, please contact the AAA by filling out the form on this page.