(This is an abridged version of a story that seems in the August problem of Marijuana Business enterprise Magazine.)
Simply because marijuana is illegal in the United States, financially distressed cannabis-associated firms are in between a rock and a really hard location when searching for relief from creditors.
It is even challenging for non-plant-touching firms to take benefit of federal bankruptcy reorganization, thanks to the U.S. Trustee Plan, which is a portion of the Division of Justice.
The Trustee Plan not too long ago has stepped up efforts to enforce federal cannabis laws as they relate to private and organization bankruptcy circumstances, according to the agency.
Agency information shows 88 enforcement actions due to the fact 2010, with 53 (or 60%) of these occurring in 2017 and 2018. Far more than 50% of these actions had been for circumstances in California, Colorado and Oregon.
There’s a glimmer of hope for ancillary cannabis firms, thanks to a current federal appeals court opinion, but only barely.
“I feel federal bankruptcy is mainly off the table,” mentioned Laura Coordes, an associate professor of law at Arizona State University.
But solutions do exist, according to professionals who spoke with Marijuana Business enterprise Magazine:
Take a appear at the U.S. Trustee Program’s marijuana enforcement actions close to you.