Banking

Subscribe to Banking

When I started representing cannabis businesses in 2010, the biggest epidemic in the industry next to I.R.C. 280E was the overwhelming lack of cannabis banking. This inability to access financial institutions for just depository accounts was staggering to businesses, leading to endless public safety hazards and organizational chaos. Almost 14 years later, the cannabis banking crisis has somewhat improved due to the 2014 FinCEN guidelines. But they’re not enough on either side of the aisle, and Congressional Research Services (“CRS”) echoed that point in a recent “Legal Sidebar”, detailing the myriad liabilities financial institutions to face if they want to bank cannabis businesses.Continue Reading Cannabis Banking: What’s a Financial Institution to Do Right Now?

Part 1 of this series discussed the lack of bankruptcy protections for cannabis companies since bankruptcy in the U.S. is an exclusively federal procedure and cannabis remains illegal under federal law and proposed a number of alternative options for businesses struggling in the current environment. Part 2 of this series focused on state law receiverships for several states.  

In the third and final part of this series, we continue to review state law receiverships for several additional states and discuss the final non-bankruptcy option for cannabis companies, an assignment for the benefit of creditors.Continue Reading Alternatives to Bankruptcy for Cannabis Companies (Part 3)

Part 1 of this series discussed the lack of bankruptcy protections for cannabis companies since bankruptcy in the U.S. is an exclusively federal procedure and cannabis remains illegal under federal law and proposed a number of alternative options for businesses struggling in the current environment. Part 2 of this series focuses on one of these alternatives: state law receiverships.Continue Reading Alternatives to Bankruptcy for Cannabis Companies (Part 2)

The problems facing the cannabis industry arising from its ongoing status as a federally illegal enterprise are numerous and well documented: 280E tax burdens, limited access to banking, exclusion from capital markets, uneven access to federal intellectual property right protections, and the inability to access the stream of interstate commerce. The recent woes faced by cannabis companies operating in mature markets reveal another key legal hurdle for cannabis companies, their investors, and their creditors: the inability to access federal bankruptcy protection. However, cannabis companies may have access to a number of contractual and state law remedies to deal with insolvency and other financial woes.Continue Reading Alternatives to Bankruptcy for Cannabis Companies (Part 1)

Earlier this week, members of the U.S. House of Representatives and U.S. Senate reintroduced legislation that would allow regulated financial institutions to work with state-licensed cannabis companies. The Secure and Fair Enforcement (SAFE) Banking Act of 2023 would disallow federal banking authorities from prohibiting, penalizing, or discouraging banks from providing financial services to state-licensed cannabis businesses and their networks of counterparties, advisors, and vendors.Continue Reading Legislators Make Another Run at Cannabis Banking Law

A group of Illinois cannabis companies face an antitrust lawsuit alleging that they maintained illegal interlocking directorates. An interlocking directorate is where a person from one company serves as an officer or director at a competing company in violation of Section 8 of the Clayton Act. On April 18, 2022, a plaintiff named True Social…

In our previous posts,[1] we discussed why state-legal medical and recreational marijuana businesses are likely not eligible to receive federal financial assistance under the Paycheck Protection Program due to the fact that these businesses are inherently engaged in federally illegal activities.

While our view has not necessarily changed, this post is intended to highlight…

bright green marijuana plant

On Thursday April 23, 2020, Representatives Earl Blumenauer (D-OR) and Ed Perlmutter (D-CO) introduced the “Emergency Cannabis Small Business Health and Safety Act” in the House. Blumenauer and Perlmutter have been influential in protecting state-legal marijuana businesses from federal interference, most recently under the 2020 federal appropriations rider.

If passed, the Act would…

Different glass bottles with CBD OIL, THC tincture and cannabis leaves on yellow background. Flat lay, minimalism. Cosmetics CBD oil.

In our previous post, we touched on the fact that state-legal medical and recreational marijuana businesses (including indirect marijuana businesses) could not receive federal financial assistance due to marijuana’s continued Schedule I status under the Controlled Substances Act (“CSA”).  While state-legal medical and recreational marijuana businesses have been adversely affected due to government imposed…