Tag Archives: marijuana

Bankruptcy Court Dismisses Cannabis Company Employee’s Chapter 13 Case

By Kyle Arendsen on Posted in US
Last month, the United States Bankruptcy Court for the District of Massachusetts denied confirmation of a cannabis company employee’s Chapter 13 plan and dismissed his bankruptcy case.  The employee, Scott H. Blumsack (the “Debtor”), is a general manager who is licensed in Massachusetts to work for Society Cannabis Co., a Massachusetts-licensed retailer, wholesaler, and producer … Continue Reading

Bankruptcy Court Doors Swing Open For Cannabis Companies, But Just Slightly

By Mark Salzberg on Posted in US
Are bankruptcy doors now opening for cannabis companies?  A decision last week from a California bankruptcy court indicates perhaps so, at least for cannabis companies that are no longer operating. Factual Background The Hacienda Company, LLC (the “Debtor”) was in the business of wholesale manufacturing and packaging cannabis products.  After it ceased operations in February … Continue Reading

Cannabis and Bankruptcy: 2020 in Review

By Mark Salzberg on Posted in US
In 2020, bankruptcy court doors continued to be shut to cannabis companies.  Perhaps most troubling is the continued bar for companies that are only tangentially involved in the state-legalized cannabis industry.  Although outlier cases exist, and even though courts have hinted that bankruptcy may be appropriate for some cannabis-related individuals and companies in some situations, … Continue Reading

Cannabis and Bankruptcy: 2019 in Review

By Mark Salzberg on Posted in US
Courts struggled this year to find a balance between state-licensed cannabis activity and the federal right to seek bankruptcy protection under the Bankruptcy Code.  During 2019, we had the first circuit-level opinion in the bankruptcy/cannabis space that appeared to open the door to bankruptcy courts, albeit slightly.  We also had lower court opinions slamming that … Continue Reading

Up in Smoke: More Cannabis Companies Get Shut Out of Bankruptcy

By Mark Salzberg on Posted in US
Marijuana Cannabis LeafsIn another loss for the cannabis industry, a district court recently affirmed the dismissal of chapter 11 petitions filed by companies that sold product used by both state-licensed marijuana growers and non-marijuana growers.  The district court’s decision in Way to Grow, Inc. demonstrates that the door that was opened by the Ninth Circuit in Garvin … Continue Reading

Bankruptcy Court Tells Debtors They Must Choose Between Bankruptcy Or Being Able To Buy Medical Marijuana

By Mark Salzberg on Posted in US
We have written before about the virtual dead end faced by marijuana companies who try to seek protection in the bankruptcy courts.  Almost uniformly, bankruptcy courts have shut their doors on marijuana companies, including their landlords and suppliers.  These courts have held that although marijuana use may be legal in a majority of the States, … Continue Reading

State Marijuana Laws vs. Bankruptcy: The Tension Grows

By Mark Salzberg on Posted in US
In prior posts, we examined whether state-licensed marijuana businesses, and those doing business with marijuana businesses, can seek relief under the Bankruptcy Code.  As we noted, the Office of the United States Trustee (the “UST”) has taken the position that a marijuana business cannot seek bankruptcy relief because the business itself violates the Controlled Substances Act … Continue Reading

Marijuana Business And Access to Bankruptcy – As Weak Competitors are “Weeded Out”, Is Bankruptcy A Viable Option?

By Mark Salzberg on Posted in US
More and more states are legalizing marijuana, whether for medical or recreational purposes. As businesses try to enter this space, competition will “weed out” the weakest competitors.  But are marijuana dispensaries and growers, and those providing ancillary services to them, able to seek relief under the Bankruptcy Code? We, along with our colleagues, John Wyand and … Continue Reading

Marijuana Businesses Barred from the Bankruptcy Courts: But How Far Will the Bar Extend?

By Mark Salzberg on Posted in US
As more and more states pass laws allowing the sale of marijuana, whether for medicinal or recreational purposes, investors will try to claim their share of what is certainly going to be a lucrative market. However, even in a growing market, private enterprises fail or need restructuring. This raises the question of whether distressed marijuana … Continue Reading
LexBlog