Insolvency & State Receivership

Because cannabis is illegal under federal law, plant-touching and ancillary cannabis businesses are generally denied access to federal bankruptcy courts. Instead, those facing insolvency must look to state receivership and other alternatives for relief.

These processes can be especially tricky for licensed cannabis businesses, which are subject to a wide variety of constantly evolving state and local regulations. Vicente Sederberg is highly experienced in this area of the law and can help you every step of the way.

Our attorneys are uniquely qualified to help business owners and creditors navigate state receivership and other insolvency proceedings that directly or indirectly involve cannabis business licenses. We are deeply familiar with the nuance and complexity of state and local cannabis regulations, and we have unparalleled experience dealing with cannabis regulators. We are also well-positioned to assist, with offices in California, Colorado, Florida, Massachusetts, and New York.

Services

  • Out-of-court restructurings
  • Transfers of state and local cannabis licenses in state receivership and insolvency scenarios
  • Providing regulatory advice to receivers operating cannabis businesses
  • Preparing memorandums analyzing license transfer issues for use by courts, operators, and investors
  • Regulatory analysis of receivership issues and assisting in determinations of appropriate insolvency proceedings
  • Assignments for the benefit of creditors
  • Winding up cannabis businesses  
  • Navigating cannabis regulatory issues associated with repossession and disposition of collateral pursuant to the UCC
  • Identifying local counsel for state receivership issues

Experience

  • Acted as cannabis regulatory counsel to a receiver analyzing state and local license transfer issues for a publicly traded company in receivership  
  • Represented a buyer of a cannabis license in negotiations with a state receiver
  • Acted as cannabis regulatory counsel to numerous borrowers and lenders in connection with structuring loans and refinancings involving licensed cannabis and hemp assets  
  • Represented financially troubled cannabis companies in workout negotiations

News

10 Tips for U.S. Cannabis Businesses Facing an Economic Downturn

By Phil Silverman
May 20, 2020

The U.S. is facing its gravest economic crisis since the Great Depression due to the coronavirus pandemic. These 10 concepts are not necessarily unique to cannabis businesses, but in an industry that’s already subject to greater federal, state and local scrutiny, they can serve as a guide for those seeking to relieve their financial stress.

Exploring Alternatives to Bankruptcy for Cannabis Businesses

By Charles Alovisetti, Phil Silverman, Jason Adelstone
Apr 17, 2020

Bankruptcy law provides advantages for financially distressed companies to restructure debt while continuing to operate. Without access to U.S. Bankruptcy Code protections, marijuana companies must turn to out-of-court restructurings and state law insolvency proceedings.

In the Media