After another rollercoaster of a year, I’m reflecting back on some of the insights my partners and I shared with the Cannabis Industry throughout the COVID-19 pandemic. One area that we’ve continued to monitor (and have recently become directly involved in) is Bankruptcy and Receivership within the Cannabis Industry. I thought I’d share an update on this topic, as well as highlight a few recent examples. Despite the prolonged financial uncertainty for many cannabis companies over the past few years, ‘failure’ as a business or investor group is still not really an option. Due to the federal marijuana prohibition, financially distressed cannabis companies face limited options when they need relief from creditors or to restructure their business. Most non-plant-touching businesses in the Cannabis space are ineligible to go through federal bankruptcy reorganization. Any advance in legalizing marijuana at the federal level would impact this. A strong business strategy requires a focus on cost structure, product availability, quality, and investment in customer experience. However, the illicit market and lack of regulation enforcement can still pose a threat to legal operators with sound strategies.
Cannabis Business Executive – Cannabis and Marijuana industry news, 02/14/2022 21:11:00