Cannabis Companies Can’t File for Bankruptcy – So Now What? | Lowndes

by Newsfeed


 

The government’s response to the COVID-19 pandemic has resulted in federal assistance to numerous industries and individual taxpayers, but notably has left the state legalized marijuana industry out in the cold

As we previously discussed here, business and individuals involved in the marijuana industry are likely ineligible for bankruptcy protection because marijuana remains illegal under federal law and the federal bankruptcy courts cannot be used to facilitate the possession or sale of illegal assets.

Even now-legal hemp businesses have faced pushback on bankruptcy protections, as recently evidenced in the case of United Cannabis Corp., which drew a still-pending attempt to dismiss from the United States Trustee disputing that the company deals solely in hemp based on its own prior SEC filings.

However,…



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