Receivership in Cannabis

Distressed Asset Recovery, Creditor Rights, and the License Monetization Dilemma

Topic Summary

Cannabis businesses fail at higher rates than almost any other industry — burdened by 280E taxes, capital access restrictions, regulatory compliance costs, and oversupply in mature markets. When a cannabis company becomes insolvent, the usual bankruptcy tools are unavailable (federal bankruptcy courts won't hear cannabis cases). State receivership has emerged as the primary restructuring vehicle, but it creates unique license-transfer complications. Robert Hoban explains the receivership playbook for creditors, operators, and investors navigating cannabis distress.

Session Outline

I. The Distress Landscape

›Why cannabis companies fail: 280E, cap structure, oversupply, and regulatory burden
›Why federal bankruptcy is unavailable for cannabis
›State receivership as the primary alternative

II. State Receivership Mechanics

›Appointment: creditor petition vs. debtor petition
›Receiver powers and limitations in cannabis
›Operating vs. non-operating receivers: implications for license continuity

III. The License Problem

›Can a receiver transfer a cannabis license?
›State-by-state analysis: which states allow receiver-operated license transfers
›Regulatory approval of the receiver as a license holder
›Time pressure: operating budgets, license renewal dates during receivership

IV. Creditor Strategies

›Secured vs. unsecured creditors: priority in cannabis receivership
›UCC Article 9 security interests in cannabis inventory and license value
›How to perfect a security interest in a cannabis license (and why most creditors get it wrong)
›Pre-negotiating receivership rights in loan agreements

V. Distressed M&A Out of Receivership

›Stalking horse bids and auction procedures under state law
›License transfer approval timing in distressed deals
›Indemnification for pre-receivership regulatory violations

VI. Landlord and Real Estate Issues

›Commercial leases with cannabis-specific termination rights
›CURES notices and the receiver's rights to assume or reject

VII. Q&A

Suggested Formats

Keynote (45 min)Panel (60 min)

Best for These Audiences

In-House CounselInvestors

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