Marijuana-related businesses who go belly up shouldn't expect any relief from federal bankruptcy courts, a bankruptcy appellate panel in the Tenth Circuit announced last Monday. Marijuana businesses, even if they're allowed by state laws in Colorado, are still viewed as illegal in the federal government's eyes and can't get relief from the federal bankruptcy system, the panel ruled.
The marijuana industry has boomed in Colorado since the state legalized recreational weed in 2013. Recreational marijuana sales reached $700 million during the first full year of legalization. But should those budding businesses stumble, they'll be barred from bankruptcy court as a result of federal laws criminalizing marijuana.