Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

There were several interesting developments this week on the federal level.  We’ll start off with the news that the Senate may not take up the issue of banking in the marijuana industry.  Sen. Mike Crapo (R.

In a noteworthy decision, the Bankruptcy Appellate Panel for the Ninth Circuit overturned a dismissal of a bankruptcy case, which the lower court had dismissed based on its belief that the landlord debtor was receiving rental income from a marijuana dispensary.  The decision is significant because it holds that a bankruptcy cannot be dismissed simply because of the mere presence of a marijuana business or related proceeds in the case.  Rather, under this decision, the dismissal of a bankruptcy must be supported by specific factual findings that demonstrate that the debtor violated federal law or that the bankruptcy trustee would be required to administer proceeds of a (federally) illegal business.
Continue Reading Dismissal of “Marijuana” Bankruptcy Not Automatic as Bankruptcy Appellate Court Overturns Dismissal of Bankruptcy Case of Landlord Debtor with Dispensary Tenant

In a recent article, senior officials with the Department of Justice’s Office of the United States Trustee (the “UST”), the federal government’s watchdog of the bankruptcy system, reaffirmed the department’s position that bankruptcy relief is not available to businesses in the weed industry.  Such a reaffirmation of a well-established policy is not new. However, the article is noteworthy in that it clarifies just how broadly the UST is willing to expand the scope of that policy and that it may prevent “downstream” participants, such as landlords of marijuana dispensaries, from accessing relief under the bankruptcy code.
Continue Reading U.S. Trustee Issues Warning to ALL Participants in the Cannabis Industry: Bankruptcy Relief May Not be Available, So Don’t Let Your Profits Go Up in Smoke