Although more than half of the states in the U.S. have legalized cannabis on a medical or recreational level, the industry itself has failed to legitimize itself due to ongoing federal illegality. One of the most glaring issues stems from the inability to use banking services, forcing marijuana business owners to deal in cash only. 

Now, a Justice Department bankruptcy watchdog is reminding the industry that this financial forbiddance also extends to companies facing financial trouble. Last Wednesday, U.S.

Justice Department Claims That Marijuana Businesses Can’t File for Bankruptcy

Although more than half of the states in the U.S. have legalized cannabis on a medical or recreational level, the industry itself has failed to legitimize itself due to ongoing federal illegality. One of the most glaring issues stems from the inability to use banking services, forcing marijuana business owners to deal in cash only. 

Now, a Justice Department bankruptcy watchdog is reminding the industry that this financial forbiddance also extends to companies facing financial trouble. Last Wednesday, U.S. Trustee Program director Cliff White sent a letter to those who handle consumer bankruptcy cases, stating that cannabis is still federally illegal and warning them not to handle any money from the sale of marijuana-related products.

White’s division oversees trustees who handle personal and corporate bankruptcy filings, essentially responsible for taking debt payments from bankrupt people. He claims that there’s been an increase in “marijuana assets” disclosed in these filings, and has warned fellow trustees not to go against the grain of federal law. 

According to White, this notice “pertains even in cases in which such assets are not illegal under state…

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