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Bloomberg Article: Cannabis Ruling Offers Narrow Path to Bankruptcy Perks

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A recent California court opinion allowing a former cannabis company to continue its Chapter 11 case offers a new but narrow pathway for similar businesses to pursue bankruptcy.

The US Trustee’s policy largely bans cannabis companies from filing bankruptcy because cannabis is illegal at the federal level. But the US Bankruptcy Court for the Central District of California’s published Jan. 20 opinion allowed the Hacienda Company’s Chapter 11 to proceed, saying the company had removed its wholesale cannabis product manufacturing and packaging business by the time it filed and was not looking reorganize as a cannabis concern.

Judge Neil W. Bason’s opinion espoused a “middle road” interpretation of the bankruptcy code, in which a court assesses a would-be debtor’s facts and circumstances before deciding whether to let a Chapter 11 case continue.

 

The opinion, while limited to the court’s jurisdiction, offers a glimmer of hope that businesses with former cannabis connections, and the right set of facts, could use bankruptcy to liquidate and pay off creditors.

Read full article:

https://news.bloomberglaw.com/bankruptcy-law/cannabis-ruling-offers-narrow-path-to-bankruptcy-perks



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New Mexico Regulation and Licensing Department revokes licenses at two Torrance County cannabis farms

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New Mexico Regulation and Licensing Department revokes licenses at two Torrance County cannabis farms



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Massachusetts: Uxbridge to refund more than $1 million to cannabis retail outlet in impact fees case

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The Town of Uxbridge has reached an agreement in Superior Court to largely refund the community impact fees paid by a cannabis store, according to court documents and the law firm representing the store

On Dec. 29, the town entered into an agreement with Caroline’s Cannabis to refund the store $1,171,633.60. According to a statement from the law firm MacMillan Law Offices, the amount constitutes 80% of the community impact fees the store paid the town and may be the first legal settlement resulting in refund of the controversial fees in the state.

The store has a location at 640 Douglas St. in Uxbridge.

According to the law firm’s statement, Caroline’s Cannabis filed a lawsuit against the town in Worcester Superior Court in 2022. The store sought an order requiring the town to produce documentation to substantiate the community impact fee it was collecting from the store.

Caroline’s Cannabis claimed it had caused no impact or costs to the town, and that the town could not collect the fees unless it could document otherwise. At the time, Caroline’s Cannabis requested to recover $1.4 million.

Read the background here

https://www.telegram.com/story/news/local/2024/01/18/carolyns-cannabis-community-impact-fees-refuns/72272643007/



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Beverly Hills Lawyer Invested in Oregon Cannabis Farm .. Percentage of Crop(s) Ended Up In Cali Market

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Willamette Week breaks the story that’s going to ruin his holidays.

One of the many weed entrepreneurs to descend on Cave Junction during the green rush was Matthew Portnoff, a partner with a specialty in cannabis law at the California offices of a white-shoe law firm.

In 2020, the Oregon Liquor and Cannabis Commission determined that weed grown at his farm in 2019 had been diverted onto the black market. But after a yearslong investigation, the agency was never able to conclude whether Portnoff authorized the leakage—or if he was instead the victim of a swindle.

Portnoff declined to comment for this story.

A graduate of UC Berkeley and the University of Southern California’s law school, Portnoff, 48, is an expert in tax law based in Beverly Hills, with a history of entrepreneurial forays. (An online database lists him as a producer of a romantic comedy starring Paris Hilton in 2006 that was panned by critics.)

In 2016, Portnoff and his wife, Luiza, purchased a Cave Junction farm for $415,000 just as the state began handing out licenses to grow recreational weed. (An LLC controlled by his father, a surgeon from California, bought 19 acres next door to his son for the same purpose.)

Two years later, Portnoff and his wife landed a license. So, eventually, did his dad. They grew thousands of plants on the 35-acre properties located along Takilma Road in the rural farmland of the Illinois Valley.

To run his new Oregon farm, Portnoff hired a local grower named Michael Horner, who’d come recommended by a California client.

But by the time the first harvest arrived, an oversupply of weed on the market caused prices in Oregon to fall by at least half.

And beginning in February 2019, the OLCC began documenting a series of concerning reports from Portnoff’s employees.

First, Horner quit his job working for Portnoff and told an OLCC inspector in February 2019 that men had arrived on the farm to take weed back to California for sale.

A month later, the inspector went to the farm to investigate. State-licensed farms are required to have surveillance cameras monitoring all aspects of the operation. But in March 2019, the inspector discovered a four-day gap in the footage—and found “many discrepancies” between the inventory on site and what was recorded in a state database. The inspector opened some storage totes to find them empty or full of “waste material.” (The OLCC declined to disclose the records identifying the discrepancies to WW, noting they were exempt from public disclosure.)

Read the full report at 

https://www.wweek.com/news/2023/12/20/a-beverly-hills-lawyer-invested-in-oregon-weed-not-all-of-the-crop-seems-to-have-stayed-in-oregon/



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