Category: Banking and Restructuring

High Stakes and Material Changes in the Bay State: Senate Bill No. 2722 vs. House Bill No. 4160

Post author By Blank Rome LLP
Post date November 18, 2025

Lauren Medeiros Forster —

There were several material changes relating to strategy, compliance, and deal‑making advanced by Massachusetts Senate Bill No. 2722 (“S. 2722”) on November 13, 2025. Below is a short summary of what you need to know about the Senate’s rewrite and meaningful reshaping of several House‑backed ideas (under House Bill No. 4160 (“H. 4160”)) for changing the legal regime of cannabis in the Commonwealth.

1. Employee Stock Ownership Plans

Employee stock ownership plans (“ESOPs”) are here to stay. Both bills tell the Massachusetts Cannabis Control Commission (“CCC”) to set up clear procedures to allow the sale of a business to employees via an ESOP and to exclude a trustee acting solely for an ESOP during or after a sale when counting toward cannabis license caps under the Massachusetts cannabis laws. That part did not change, which is a positive result for the Commonwealth. The proposed changes to the current law enable succession planning, retention, and worker‑ownership options for operators and investors without tripping license caps and also improve exit/liquidity paths for owners. This also means there would be no caps on the number of licenses an ESOP can own.

Tags Massachusetts

Banking and Restructuring Controlled Substance Act Interviews Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Closing the Hemp Loophole: What Monday’s Farm Bill Update Means for Delta-8 and Hemp-Derived THC

Post author By Blank Rome LLP
Post date November 11, 2025

Marc A. Polito —

At Blank Rome’s 9th Annual State of the Cannabis Industry Conference, Frank A. Segall, partner and co-chair of the firm’s Cannabis practice, asked a panel—including Joseph Andreae, CEO of CULTA, Jared Maloof, CEO of Standard Wellness, Ed Schmults, CEO of Firelands Scientific, and Jim Scott, CEO of Statehouse Holdings—what is the number one issue confronting the cannabis industry today? All four chief executives unanimously echoed the same sentiment: the number one issue confronting state-regulated cannabis operators today is the unregulated hemp market, which has become a growing thorn in their sides as the hemp market picked up steam over the past few years. Well, with new action by lawmakers yesterday, it appears this issue is on the brink of being resolved!

Over the past six years, the hemp industry has transformed from a niche agricultural sector into a national marketplace for diverse cannabinoid products. That transformation was catalyzed by the 2018 Farm Bill, which legalized hemp by defining it as cannabis with no more than 0.3 percent delta-9 tetrahydrocannabinol (“THC”) on a dry-weight basis. What resulted from this was an unintended market: intoxicating hemp-derived cannabinoids such as delta-8 THC, delta-10 THC, and other analogs produced from cannabidiol (“CBD”) isolates through chemical conversion. The “hemp loophole,” as it came to be known, allowed psychoactive products to proliferate in convenience stores, restaurants, and online and circumvented the strict controls applied to state-licensed cannabis.

Tags delta-10, delta-8, delta-9, Farm Bill, hemp, hemp loophole

Banking and Restructuring

The Cannabis Industry’s $6 Billion Debt Wall

Post author By Blank Rome LLP
Post date October 1, 2025

Gustav Stickley V —

A debt avalanche is bearing down on the U.S. cannabis market to the tune of roughly six billion dollars coming due by the end of 2026, with the top five borrowers—each a multi-state operator (“MSO”)—accounting for about $3.4 billion. The sector’s reliance on costly debt, born of limited access to traditional capital, has set the stage for a potentially messy, uneven reckoning.

Why this matters now

Scale and timing: The maturities bunch up into 2026, compressing the refinancing window and elevating risk across the ecosystem.
Cash flow stress: Many capital structures are expensive, and several operators still burn cash, curbing their ability to refinance on favorable terms.
Market significance: Despite headwinds, cannabis generated $32 billion in 2024 revenue, employed 400,000+ people, and contributed $4.4 billion in state taxes—meaning outcomes here have real economic spillovers.

Tags debt

Banking and Restructuring Controlled Substance Act Employment Issues Legislation Meet Blank Rome Mergers and Acquisitions Regulatory Compliance

Turning Over a New Leaf: How Cannabis Receiverships Can Cultivate a Stronger Future

Post author By Blank Rome LLP
Post date September 10, 2025

Lauren Medeiros Forster —

It is no secret that the cannabis industry has been on a wild ride lately, especially in mature markets. Many operators are feeling the pressure, and they are not alone. Let us break down the current landscape, why it is tough out there, and how receiverships and distressed sales might actually be a positive move for struggling cannabis companies.

Many developed cannabis markets are facing serious challenges. Inflation and a shaky economy are making it harder for businesses to stay afloat (regardless of industry type), on top of market saturation that has caused cannabis prices to drop, and tight profit margins for businesses in the more established marijuana states. This is compounded with the harsh effects of tax burdens due to 280E—where cannabis companies are unable to deduct otherwise established business expenses from gross income as a result of the federal illegality of cannabis in the United States—and lack of liquidity from inability to access traditional debt financing and institutional equity markets. As a result, many cannabis companies are finding it difficult to pay their debts and keep the lights on. And because cannabis is still federally illegal in the United States, struggling cannabis operators are limited when it comes to utilizing federal bankruptcy mechanisms for relief.

But hope is not lost. Even in tough times, cannabis businesses along with their management, creditors, and investors, have found options to help their companies restructure and move forward. One of those is a state-level receivership.

Tags distressed sale, receivership

Banking and Restructuring Mergers and Acquisitions Regulatory Compliance

November 2024 Transaction Highlights: A Month of Newsworthy Successes

Post author By Blank Rome LLP
Post date December 4, 2024

Marc A. Polito —

Our Cannabis Industry Group would like to thank our clients—major cannabis market leaders—for yet another successful month, trusting us to close several notable and newsworthy deals across various practice areas and industries in November 2024. Our team of dedicated attorneys provided strategic counsel on complex transactions, including banking and finance, mergers and acquisitions, workouts and receiverships, and public securities, showcasing our commitment to delivering exceptional results for our clients. These achievements underscore the strong partnerships we have with our clients, as well as our firm’s extensive experience and collaborative approach to navigating intricate legal and business landscapes while servicing major market leaders in the cannabis industry.

Tags financing, transactions