Rescheduling & Restructuring – How Could Cannabis Rescheduling Affect Bankruptcy Availability?

Discussions about the possibility of cannabis rescheduling have continued on and off for years, with recent reporting suggesting that the administration is again "considering" the move (which we have previously discussed here). While rescheduling could have material benefits for a company's operations and finances, what impacts might it have on a cannabis-related company's ability to file for bankruptcy relief?

To answer this question, it's first worth reviewing why cannabis-related companies may be prohibited from filing for bankruptcy protection. Cannabis remains a Schedule I controlled substance under the federal Controlled Substances Act, 21 U.S.C. §§ 801-904 (the "CSA"). The CSA prohibits, among other things, the manufacture, distribution, dispensing of, or possession with intent to manufacture, distribute, or dispense, a "controlled substance." See CSA, § 841(a). a "controlled substance" includes any drug or other substances categorized in Schedule I through