Medical marijuana business can get expensive but fear not, bankruptcy law is here for the rescue if you have the right bankruptcy lawyer. No its not Saul from the AMC Show “better call Saul” but you can call bankruptcy attorney Roland Kedikian.
Don’t get me wrong. Medical marijuana is legal in California so long as you comply with the legal requirements. You can now grown medical marijuana in Adelanto in San Bernardino. And you can off-course have dispensary businesses in many cities in Los Angeles County including in Eagle Rock next to Glendale CA where our office is located. (you can’t have one in Glendale). Some of the dispensaries even have 5 start Google reviews just like our bankruptcy law firm (you can read our reviews here).
Whether you are in the dispensary business or the cultivation business, you have costs just like any other business.
You have payroll for employees. Security system that is required by law to record 24/7. You must comply with regulatory requirements like permits and licenses. Transportation and distribution is difficult. Payment processing is particularly a problem because some banks will not accept your business. You need to buy the buds to begin with. And of course you have that huge electric bill for growing all them plants inside. Its not cheep.
But it could also be very lucrative if you know what you are doing. Just like anything new, people are jumping in with both feet in the business. Dispensaries and cultivation seems to be the newest craze. Some people are making a lots of money. Some are getting in lots of debt. We had the Internet bubble, the real estate bubble and maybe we are now in the middle of the marijuana bubble. As in any bubble, the marijuana bubble may be bursting. Some medical marijuana businesses owners are in debt and having financial difficulties. But can they file bankruptcy?
That is what actually happened to a marijuana business owner who decided to file for bankruptcy protection in Denver Colorado. The 10th U.S. Circuit Court of Appeals at Denver held that marijuana businesses can not get relief in the bankruptcy system even if they’re legal under Colorado state law because bankruptcy is federal law and federal law prohibits marijuana businesses. BUT if you plan your bankruptcy case before you file, you may have a chance in getting the bankruptcy discharge.
The debtors in the Colorado case sought bankruptcy protection after losing a lawsuit against their tenants. But the court held that because they wanted to continue with the marijuana business, their business violated federal law. Therefore they can not use federal bankruptcy law to fund bankruptcy repayment plans with marijuana sales. Also that cases was very specific in that the debtor continued to own Marijuana plants and therefore the chapter 7 trustee could not sell it to administer assets.
So what happens if you try your hand at the medical Marijuana business and it does not work out as well as you had hoped? What options are available to you in bankruptcy?
Sell everything before you file a chapter 7. Alternatively, sell everything and start a business that is not illegal under federal law if you have to do chapter 13. Remember in chapter 13 you need some sort of income. A regular job will do. Either way, you need the best bankruptcy attorney because the US trustee’s will almost certainly file a motion to dismiss. Ready to make some law? Then you know who you gonna call. Better call Roland Kedikian.
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to stay informed about bankruptcy law in general and how amazing but true things can happen when you have the right bankruptcy attorney on your side. Have a question? you can always call Roland at 818 409 8911. Want more amazing bankruptcy stories? Catch my previous post about expanding your Uber business and discharging a brand new car though bankruptcy protection.
Disclaimer: And I am putting this in plain English not a bunch of legalese. We do not advocate shady dealings or
conduct that is designed to abuse the bankruptcy system. We practice in bankruptcy only, so we pretty much know all the amazing and wild stories that happen in bankruptcy. Our objective is to inform you. We want to dispel the misconception that many debtors believe that bankruptcy courts are like the inquisition who will torture you to death. The truth is bankruptcy judges are some of the most fair judges trying to help the average American, when they can, within the law. You just need to go to the bankruptcy court with the right bankruptcy attorney who will argue the facts of your case and the the law in your particular situation for the judge to consider. I little planning goes a long way though.
