Lawrence J. Kotler, left, and Ryan Spengler, right, of Duane Morris. Courtesy photos Potential Bankruptcy Relief for Individual Owner of Cannabis Businesses?
The court found that the simple administration of certain ownership interests of retail cannabis dispensaries "is not in and of itself necessarily equivalent to administering marijuana assets." And, as such, a Chapter 7 trustee could administer and monetize these ownership interests without violating the law.
August 12, 2024 at 10:42 AM
7 minute read
Bankruptcy
In a recent opinion, the U.S. Bankruptcy Court for the Northern District of California in the matter of In re Callaway, No. 24-30082-DM, 2024 WL 3191673 (Bankr. N.D. Cal. June 26, 2024), created a potential loophole for plant-touching cannabis businesses desiring bankruptcy protection when it denied two separate motions to dismiss an individual's Chapter 7 bankruptcy case. In particular, the court found that the simple administration of certain ownership interests of retail cannabis dispensaries "is not in and of itself necessarily equivalent to administering marijuana assets." And, as such, a Chapter 7 trustee could administer and monetize these ownership interests without violating the law.
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