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Financial and Real Estate Hurdles Leading to Insolvency Issues in the Cannabis Space

Tuesday, April 18, 2023

The cannabis industry faces renewed insolvency challenges. Due to the industry's federal illegality, cannabis businesses are unable to access traditional banking and financing options, making it difficult for them to raise capital and manage cash flow. This has resulted in many businesses operating on a cash basis, leading to accounting and tax compliance issues. Additionally, the high cost of compliance with state and local regulations, excise taxes, and lack of access to traditional banking platforms has made it challenging for cannabis businesses to operate profitably. Although largely denied access to the bankruptcy courts, some cannabis businesses have sought out restructuring options and bankruptcy alternatives to address these issues. The insolvency issues in the cannabis industry highlight the need for regulatory and financial reform at the federal level to support the growth and sustainability of the industry.


Michael Hogan – Partner, Armanino LLP
Aram Ordubegian  Partner, ArentFox Schiff LLP

Jason Rosell  Partner, Pachulski Stang Ziehl & Jones LLP

Bounty Hunter  

1521 Mt Diablo Blvd
Walnut Creek, CA 94596-4515

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