Marijuana businesses aren’t allowed to go up in smoke, even when they aren’t making any money in Colorado. So what are they going to do?
The burgeoning marijuana industry in Colorado has run into yet another legal snafu, as inconsistencies between state and federal laws are preventing businesses and owners from filing for protection under the bankruptcy law.
Photo courtesy of Rick Proctor (Unsplash.com)
Attorneys for Sarah and Frank Arenas of Denver filed a 43-page appeal stating that a judge dismissed their August bankruptcy petition in error because their assets were derived primarily from the medical marijuana industry, The Denver Post reported. By refusing to protect such assets in bankruptcy in the same way that other assets are, the appeal argues, the federal government is passively prosecuting crimes that it earlier said it would not.
The Obama administration said in late August that it would not challenge state laws legalizing marijuana as long as strict regulations on the sale and distribution of the drug are enforced, according to The Washington Post.
“The [Arenases] should not be faulted, or more importantly lose the right to a discharge of their debts, for playing by rules created by the same agency that seeks to dismiss their bankruptcy case for breaking those rules,” attorney Daniel Garfield wrote, as cited by The Denver Post. “The federal government has deliberately and actively allowed a legal marijuana industry to flourish in Colorado and not to prosecute participants in that industry. The federal government has made a conscious decision to allow [the Arenases’] otherwise illegal business to operate.”
The U.S. Bankruptcy Appellate Panel of the 10th Circuit Court will decide whether to overturn or uphold the lower court’s ruling.
Either decision is likely to be used as an important precedent going forward. Should the ruling be upheld, it will create more uncertainty in the already somewhat shaky business climate that exists in the Colorado marijuana industry. If the ruling is overturned, businesses in this sector may take it as a sign that the federal government is ready to recognize their legitimacy, perhaps motivating them to fight for other, similar, business rights.
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
