Even Indirect Income from Cannabis Can Get You Banned From Bankruptcy

Even Indirect Income from Cannabis Can Get You Banned From Bankruptcy

Despite widespread trends in state-level legalization and decriminalization of high-THC cannabis and growing acceptance of cannabis among Americans, cannabis and cannabis products remain illegal under federal law.  At least 37 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands have adopted a medical cannabis regulatory program – and 18 states, two territories, and the District of Columbia have enacted measures to allow and regulate adult-use cannabis.  Companies and individuals operating within those state-legal markets often face unique difficulties and challenges and lack access to basic financial services and legal protections widely available to non-cannabis operators.  As we’ve written before, in situations of financial difficulty or distress, cannabis operators and their owners, vendors, suppliers, and business partners lack guaranteed access to the bankruptcy courts. Some bankruptcy courts have found that the mere presence of cannabis (usually called “marijuana”) near a bankruptcy case does not automatically prohibit bankruptcy relief, but many others have bent over backwards to find cause to dismiss these cases.  In the latter, bankruptcy courts have consistently dismissed cases when a debtor directly engages in violations of the Federal Controlled Substances Act (“CSA”) or where the debtor’s reorganization efforts depend on proceeds derived from CSA violations. A recent ruling from the U.S. Bankruptcy Court for the District of Arizona serves as another reminder that federal bankruptcy courts are hostile territory for cannabis companies and their operators.  Ryan Mayer filed a bankruptcy case under Chapter 13 of the U.S. Bankruptcy Code, seeking to reorganize his personal debts and liabilities.  In a Chapter 13 bankruptcy, an individual proposes a plan to re-pay all or a portion of his debts.  The amount to be repaid depends on how much he earns, the amount and types of debt owed, and how much property he owns.  As a general rule, debtors must…

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Source : Even Indirect Income from Cannabis Can Get You Banned From Bankruptcy

reposted by Cannabis News World

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