Hackney advises financial institutions and cannabis-related businesses in the complex interaction between banking law, bankruptcy law, and cannabis law. However, the Bankruptcy Code is a federal law and bankruptcy judges are federal judges. Financial institutions in the United States, including state-chartered banks, are inextricably intertwined with the federal banking system and federal law. While most bankruptcy judges tend to be debtor-friendly in the early stages of cases, they nonetheless are bound to follow federal law. Adair eventually was forced to withdraw her bankruptcy petition after an objection by the Office of the United States Trustee, a federal bankruptcy watchdog entity and part of the Department of Justice.
Financial institutions in the United States, including state-chartered banks, are inextricably intertwined with the federal banking system and federal law. Since cannabis is considered a Schedule I drug under the Controlled Substances Act (CSA), federal law prohibits banks from providing even the most basic financial services (such as checking accounts) to cannabis-related businesses (CRBs).
Even in states that have legalized the recreational use of cannabis by adults, most banks actively avoid working with CRBs and the individuals associated...
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