As you know, cannabis is a tough industry to be successful in…especially with high costs, heavy taxes, and extreme competition.

It’s not only tough for the operators, but it can also be tough for investors to watch their investment struggle to provide a positive return.

Since bankruptcy is not an option for cannabis businesses, the next best option could be receivership.

Receivership allows a court-appointed person to either attempt to turn the business around or help liquidate assets and pay off obligations including debt owed to investors, but of course, there are many nuances to the process.

Receivership Laws by State

Click on a state below to see the details about receivership

cannabis business receivership

Scenarios Where Receivership May Help

Investor Fraud or Deceit

Have you invested into a cannabis business and the operators (or even your co-founder) misrepresented their capabilities or ability to execute?

Co-Founder Disputes

Are you and your co-founders finding it incredibly difficult to come to any consensus about the future of the cannabis business which has created an unstable environment


Has a key member of your team taken or used money for their personal benefit and not to grow the business?

Mismanagement of Funds

Has a fiduciary in your cannabis business failed to observe laws or guidelines when handing the finances including negligence or neglect of their duty?

Overbearing Debt

Has your cannabis business taken on too much debt that they cannot reasonably pay back and need to get out of the obligations?

Bad Joint Venture Deals

Has your business entered into a joint venture agreement and the deal has gone completely sideways?

benefits of receivership

Benefits of Appointing a Receiver

  1. Safeguard and preserve assets as well as stop any fraud.

  2. Use broad powers to institute change in the business.

  3. Operate and stabilize the business in anticipation of a sale.

  4. Maintain or even increase the value of the underlying assets.

  5. Allow for a quick investigation into the debtor’s financial affairs.

  6. Create greater credibility and authority when dealing with employees, customers, vendors and other creditors.

  7. Institute litigation to recover fraudulently conveyed assets.

  8. Freeze and compel return of debtor property and issue subpoenas to investigate asset transfers.

  9. Bankruptcy is not an option for cannabis businesses, so receivership is next best option to seek remedies.

  10. Less publicity and laws governing receiverships are less well-defined, thus providing more flexibility and creativity to find a solution.

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