Michigan cannabis companies have faced a challenging environment in the past year, with the price of cannabis flower rapidly declining, causing margins to narrow at a time when competition is increasing.
As a result, some cannabis companies have struggled to pay their bills, and some are now under the control of a court-appointed receiver, which is one of the few options available for lenders to recover their investments in the cannabis industry.
While using a court-appointed receiver is common in many industries, it's relatively new to Michigan's cannabis industry, which is still growing but is becoming an increasingly challenging environment to operate in because of a number of factors in addition to declining cannabis flower prices, like more competition and limited access to traditional funding sources, among others.
Michigan Gov. Gretchen Whitmer signed into law in 2020 a bill that extended the court-ordered receivership process to Michigan's cannabis industry, providing a state-level remedy for those in the cannabis industry that are unable to take advantage of federal bankruptcy courts.
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