Cone Wholesale Agreements: Key Contract Terms to Include

Why Written Agreements Matter

A handshake deal may work for small orders, but as your wholesale business grows, written agreements protect both parties and prevent misunderstandings that can damage relationships and your bottom line.

Essential Contract Provisions

• Pricing and Payment Terms: Specify the exact pricing, volume discount tiers, payment due dates, and penalties for late payment.
• Minimum Purchase Commitments: Define any minimum monthly or annual purchase requirements and the consequences of failing to meet them.
• Territory or Exclusivity: If granting exclusive distribution rights, clearly define the geographic territory, product scope, and performance requirements for maintaining exclusivity.
• Product Specifications: Include detailed product specifications that define acceptable quality standards and tolerances.
• Liability and Indemnification: Allocate risk appropriately between manufacturer and distributor for product liability claims.

Working with an Attorney

Have a business attorney review all wholesale agreements before signing. Cannabis-specific attorneys can help you address industry-unique issues like compliance obligations, license contingencies, and regulatory risk allocation. The cost of proper legal review is minimal compared to the cost of a poorly drafted agreement that leads to disputes.