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While bankruptcy courts throughout the country have historically been resistant to permitting debtors with connections to the cannabis industry to avail themselves of the protections of federal bankruptcy law, a recent trend may be emerging in which bankruptcy courts authorize the opposite and permit these debtors to remain in bankruptcy.
The tension arises because, while cannabis may be legal to possess and consume under the laws of certain states, cannabis remains a prohibited Schedule 1 drug under the Federal Controlled Substances Act.
In this Law360 article, Restructuring & Bankruptcy partner Bethany Simmons and associate Noah Weingarten discuss the recent trend of bankruptcy courts permitting cannabis-related bankruptcies, despite historical resistance due to federal law, and the complex legal challenges that remain unresolved in these cases.
The tension arises because, while cannabis may be legal to possess and consume under the laws of certain states, cannabis remains a prohibited Schedule 1 drug under the Federal Controlled Substances Act.
In this Law360 article, Restructuring & Bankruptcy partner Bethany Simmons and associate Noah Weingarten discuss the recent trend of bankruptcy courts permitting cannabis-related bankruptcies, despite historical resistance due to federal law, and the complex legal challenges that remain unresolved in these cases.
