Marijuana Bankruptcy Reform Could Be Inching Closer for US Operators

Distressed U.S. marijuana operators remain largely unable to access bankruptcy relief, an ongoing challenge in a tough industry where business failures are common. But with federal marijuana rescheduling possible in the near future – and with signs of shifting attitudes in recent bankruptcy court cases – reform could be somewhere over the horizon.

Duane Morris’ Ryan Spengler is cautiously optimistic that progress in court rulings, combined with rescheduling, could help open the door to new bankruptcy options for U.S. plant-touching marijuana companies. Read the full article on the MJBiz Daily website.

What Rescheduling Could Mean For Cannabis Bankruptcies

Lawrence J. Kotler, Seth A. Goldberg and Ryan Spengler authored the Law360 article, “What Rescheduling Could Mean For Cannabis Bankruptcies.”

More than 75% of the U.S. population lives in states that have legalized cannabis for adult and/or medical use. Pursuant to a 2022 directive from President Joe Biden, a 2023 recommendation of the U.S. Department of Health and Human Services, and a scientific review released in January supporting the HHS’s recommendation, the U.S. Drug Enforcement Administration is now evaluating whether to reclassify cannabis as a Schedule III drug.

Read the full article. 

Bankruptcy Court Sides With Cannabis Business (Twice) in Reorg Plan

Lawrence Kotler and Ryan Spengler authored The Legal Intelligencer article, “Bankruptcy Court Sides With Cannabis Business (Twice) in Reorg Plan.”

“In contrast with a majority of bankruptcy courts that routinely dismiss cannabis-related cases for perceived violations of the Controlled Substances Act (CSA), the U.S. Bankruptcy Court for the Central District of California in the recent opinion In re Hacienda, No. 2:22-BK-15163-NB, (Bankr. C.D. Cal. July 11, 2023), refused to conform to the same historical standard. Instead, the Bankruptcy Court struck down the U.S. trustee’s motion to dismiss not once but twice in favor of confirming a marijuana business’ Chapter 11 plan of reorganization.”

Read the full article.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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