This chapter discusses the unique challenges faced by cannabis businesses in accessing federal bankruptcy courts, leading to complex cases and higher financing costs. It explores alternative options such as state-level receiverships and the use of the state uniform commercial code foreclosure process. The chapter also examines potential solutions including chapter 15 of the bankruptcy code, out of court workouts, and contractual measures for protection.
Cannabis companies can find themselves in financial distress but are generally locked out of the federal bankruptcy courts. What are their options? Perkins Coie Associate Tommy Tobin sits down with Billy Organek, program fellow at Harvard Law School’s Bankruptcy Project, to discuss the importance of bankruptcy law and options companies can seek outside of the federal bankruptcy process.