Can Your Cannabis Business File For Bankruptcy In Florida?
Floridians love weed and have loved it for decades. Local lawmakers’ attitudes toward it vary from one jurisdiction to another, which is why recreational cannabis remains illegal at the state level, even though it has been decriminalized in some counties and municipalities, starting with Miami-Dade, Broward, and Palm Beach Counties in 2015. Meanwhile, federal law continues to classify cannabis as a schedule I controlled substance, more illegal even than cocaine and fentanyl. Nowhere is the hypocrisy of federal cannabis policies more obvious than when it comes to bankruptcy protection for cannabis businesses. Bankruptcy cases are governed by federal laws, and every person, and every business, has the right to file for bankruptcy protection; neither pending divorce nor pending criminal charges against you can stop you from filing for bankruptcy protection if you need it. Cannabis businesses are among the very rare exceptions; the legal weed industry is still so illegal that bankruptcy courts will not touch it. If your cannabis business is in dire straits, a Jupiter debt lawyer can help you in ways that the 420 unfriendly bankruptcy courts cannot.
If Not Bankruptcy Protection, Then What?
If you are wondering how so many businesses manage to survive enormous reversals of fortune, chapter 11 bankruptcy is often the answer. This type of bankruptcy enables a business to enter agreements with many creditors regarding the settlement and repayment of its debts, and while it may need to liquidate some of its assets, the business stays in its possession of its current owners. Cannabis businesses are not eligible for bankruptcy protection, and to make matters worse, they also often have a difficult time getting insurance to protect them from financial losses. If the court determines that your company is ineligible for bankruptcy protection, you have the option to enter a receivership or to settle your debts out of court with your creditors.
Receivership is as scary as it sounds. A receiver takes control of your business and has the right to settle its debts, or even to sell the business, with little input from you, the business owner. Much less frightening, but still daunting, is to be your own bankruptcy court and negotiate with each of your creditors individually. This is a big project, but it is the best option if you want to keep your business. It is best to do this by working closely with a lawyer to help you settle and renegotiate the debts of your cannabis business. Your lawyer may be able to help you settle your debts for a much lower amount than you originally owed or extend the repayment term.
Contact a South Florida Debt Lawyer About Bringing Your Cannabis Business Back From the Brink of Insolvency
Legal cannabis is in high demand, but cannabis businesses are missing some of the legal protections that other businesses have. A South Florida debt lawyer can help your legal cannabis business get a new lease on life, even though the cannabis industry only has legal rights in certain contexts. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.