Hope For Those Going Up in Smoke: Cannabis Industry Eyes Bankruptcy Reform Amid Legal Limbo
Distressed U.S. cannabis operators, historically barred from bankruptcy relief due to federal legal constraints, may soon find a glimmer of hope. As attitudes shift and federal marijuana rescheduling looms, the landscape for financial restructuring in the cannabis industry could change significantly.
Legal Paradoxes
Ryan Spengler, an associate specializing in financial restructuring law at Duane Morris, expressed cautious optimism to MJBizDaily. He highlighted that evolving court stances, coupled with potential federal rescheduling of cannabis, might pave the way for new bankruptcy avenues. “If there’s a movement from these bankruptcy courts before rescheduling even happens, if rescheduling were to happen, you would expect more courts to take similar stances – if not more drastic stances – toward favoring cannabis-related companies in bankruptcy,” Spengler noted.
Emerging Alternatives And Seeds Of Judicial Change
Cannabis companies often turn to alternatives like state court receiverships or out-of-court restructuring. Some …