Repost: U.S. Federal Bankruptcy Isn’t A Choice For The Cannabis Sector, But Options Exist.
This article from JDSupra, published yesterday (April 6) is so apropos to our focus - and brings an American counter-balance to our frequent Canadian emphasis - that we are delighted to bring it to our readers.
"As the cannabis industry continues to expand, there will inevitably be businesses within the sector that encounter financial difficulty and may require insolvency assistance to either restructure or liquidate. Unfortunately, due to the federally illicit status of cannabis, bankruptcy, which is governed by federal law, is inaccessible for cannabis businesses under present policy. Several federal courts have even extended the bar to bankruptcy access to companies with tangential ties to the cannabis industry, such as landlords that lease space to cannabis businesses or companies that produce equipment utilized in the cannabis industry (although, as discussed below, some flexibility may be emerging for companies with tangential ties to cannabis within the Ninth Circuit, which encompasses Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington). Notwithstanding the current lack of access to bankruptcy, cannabis businesses may still have several non-bankruptcy options for addressing financial hardship: ... "
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