Trump Launches Crack Down On Workers In Cannabis Industry Trying to Save Their Homes Using Legal Bankruptcy Courts
Mon Jul 15 2019
A U.S. Trustee Program, part of the Justice Department, is using the US bankruptcy courts to impose the federal marijuana ban in states that have legalized medicinal and recreational cannabis, blocking people who work in the marijuana industry from using the bankruptcy system to save their home or business. The program began under the Obama administration but starting in 2017, the program ramped up enforcement and began a large effort to uncover bankruptcy filers receiving income from cannabis-related activities and prevent them from using bankruptcy courts.
Cannabis use, cultivation, and distribution still remains illegal at the federal level, and employees and small businesses are discovering that links to cannabis related activities may prevent them from getting a new start using bankruptcy. People earning wages can use chapter 13 of the US bankruptcy code to stop home foreclosure and pay back debts over a longer period of time, up to five years.
Cannabis businesses for most of their lives have been denied access to federally chartered banks, forcing them to deal in cash only transactions. Landlords who receive rent from cannabis business or dispensaries also have been barred by judges from using bankruptcy. The lack of
There were only 29 cannabis bans in 2017 and 24 in 2018 since the Trump administration launched it cracked on cannabis-related businesses. Although everyone being penalized for working in an industry that has a tremendous benefit to society is unfair, it is still a small portion of all chapter 13 bankruptcies in the US. In 2018, more than 288,000 chapter 13 bankruptcies filed, but the cracked down importance is likely to grow as the cannabis industry continues to develop into more states.
For people whose homes are at risk of foreclosures, opposition from a U.S. trustee will often force them to pull out from their bankruptcy filings or forego income linked to cannabis-related activities before going in front of a bankruptcy judge.
In 2017, the Justice Department sought to stop an elderly Washington woman out of chapter 13 because she received a small sum of $700 a month from her son, who lived in her house and worked for a cannabis-related business. A U.S. trustee finally stopped its challenge after the woman promised to stop taking that money, court records show.
This crackdown shows the importance of cannabis reform at the federal level. So make sure to let your congressman know your thoughts that they should be protecting workings in the cannabis industry.