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Cannabis Ruling Lights Path For Bankruptcy Protection

Associates Jane Haviland and Kathryn Droumbakis co-authored an article in Law360 about how the March decision in Blumsack v. Harrington by the Bankruptcy Appellate Panel (BAP) for the US Court of Appeals for the First Circuit has left the door open for those employed in the cannabis industry to seek bankruptcy relief under certain conditions.

The authors wrote, “The BAP's decision in Blumsack reasons that debtors can continue to participate in the cannabis industry and avail themselves of bankruptcy relief, so long as the proposed plan is not tainted by assets derived from violations of federal law… Bankruptcy relief may be available for individual debtors and corporate participants in the medical cannabis industry if rescheduling occurs or the FDA approves marijuana as a prescription drug.”