Kentucky hemp farm facing $9M bill wants contract voided over coronavirus

A hemp farm in Kentucky has asked a court to nullify its contract with an Oregon processing facility, saying neither party was able to uphold its end of the agreement and that coronavirus measures in both states should trigger language making the contract moot.

Third Wave Farms filed the request Friday after Oregon LLC Pure Valley Solutions sent the farm a $9 million invoice last month in connection with their contract for the processing and production of a winterized CBD oil.

Third Wave Farms argues that the Oregon facility did not not have the capacity to produce the amount of the CBD oil discussed in the May 2019 contract – up to 5,000 liters – and that the product produced did not meet the contract’s specifications.

The farm also asked the court declare the agreement “not enforceable” or order that it be terminated “in light of the spread of the coronavirus and the state of emergency declared in Kentucky … and under similarly applicable executive order(s) by the governor in the state of Oregon.”

The case is a likely early test of whether federal courts will consider the pandemic a trigger for so-called “force majeure” language, a provision in many contracts saying that parties aren’t obliged to meet the terms if they are prevented by events they can’t control.

Kentucky Gov. Andy Beshear declared a state of emergency on March 6. Oregon Gov. Kate Brown took the same action on March 7.