Cannabis receivership typically takes one of two paths. In some cases, it enables distressed cannabis businesses to rebound and become solvent. But when that’s just not possible, it’s an avenue to organize and liquidate assets for creditors and / or investors to recoup some value.
Since businesses in this industry cannot declare bankruptcy due to longstanding federal illegality of cannabis, receivership is often the last resort for business owners to try to get something out of their enterprise before it shuts down for good. And that is exactly what a receivership should be—a last resort.
Receivership is a powerful and often necessary tool, but with a defined operations strategy, financial monitoring and targeted goals, it’s possible to avoid a receivership involving litigation and the courts—not to mention the substantial effort and emotional strain that comes with it.