bankruptcy – Cannabis Industry

Cannabis companies had long been shut out of the U.S. bankruptcy system because federal courts refused to administer assets derived from or connected to federally prohibited activity. That meant distressed cannabis operators were left only with state-law options including receiverships, out-of-court restructuring or liquidating assets piecemeal—until now. On May 9, 2026, the U.S. Bankruptcy Court for the District of Delaware did something no federal court had ever done before: acting under Chapter 15 of the Bankruptcy Code – the U.S. framework for recognizing and aiding foreign insolvency proceedings – it recognized a Canadian (CCAA) proceeding involving a cannabis enterprise notwithstanding the continuing illegality of marijuana under federal law.

Read the full Alert on the Duane Morris LLP website.

April 29, 2024 by Duane Morris

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.

March 28, 2024February 25, 2025 by Duane Morris

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.

February 8, 2024February 25, 2025 by Duane Morris

Webinar Replay: Bankruptcy, Receiverships and Reorganization

A webinar replay of Mainstreaming Cannabis: Bankruptcy, Receiverships and Reorganization is now available for viewing.

November 3, 2023 by Duane Morris

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.

February 11, 2021February 16, 2021 by Duane Morris

Cannabis 401 Webinar: Tips for Having a Successful Cannabis Workout

Duane Morris is hosting the webinar, “Cannabis 401: How to Prevent Your Cannabis Investment from Going Up in Smoke: Tips for Having a Successful Cannabis Workout,” on February 25, 2021, from 12:30 p.m. to 1:30 p.m.

Please visit the firm website for more information and to register.

July 21, 2017July 26, 2017 by Duane Morris

Is Bankruptcy An Option For Ancillary Marijuana Businesses?

On June 8, 2017, Clifford J. White III, director of the U.S. Trustee Program, proclaimed before a congressional subcommittee that “debtors with assets or income derived from marijuana may not proceed through the bankruptcy system.”

To read the full text of this article, please visit the Duane Morris LLP website.