Leah M. Eisenberg Quoted in Bloomberg Law, “Chapter 15 Bankruptcy Is Untapped Option for Cannabis Industry”

Leah M. Eisenberg, partner in the firm’s Bankruptcy, Restructuring and Creditors’ Rights practice group, was recently quoted in a Bloomberg Law article titled, “Chapter 15 Bankruptcy Is Untapped Option for Cannabis Industry.” The article discusses how although U.S. cannabis companies cannot currently use traditional bankruptcy protections like Chapter 11, they may be able to restructure through foreign proceedings and seek recognition under Chapter 15 of the U.S. Bankruptcy Code. However, no cannabis business has yet tested this option.

Financing for cannabis businesses has a complicated structure because they can’t access traditional banks, said Leah Eisenberg, a partner at Pashman Stein Walder Hayden PC who handles cross border representations and cannabis-related financing matters. Because these companies mostly operate on a cash-only basis, they are vulnerable to theft, embezzlement, and fraud, she said.

States have receivership statutes, but not all are robust or benefit cannabis businesses equally. Every state has different rules regarding the transfer of cannabis licenses—which, along with inventory, are often companies’ largest assets, Eisenberg said.

Financing for cannabis businesses has a complicated structure because they can’t access traditional banks, said Leah Eisenberg, a partner at Pashman Stein Walder Hayden PC who handles cross border representations and cannabis-related financing matters. Because these companies mostly operate on a cash-only basis, they are vulnerable to theft, embezzlement, and fraud, she said.

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