COLORADO: Buzz kill? A U.S. bankruptcy judge has dismissed the case of a Denver marijuana business owner, saying that though his activities are legal under Colorado law, he is violating the federal Controlled Substances Act.
In dismissing the case filed in U.S. Bankruptcy Court in Denver by Frank Anthony Arenas, Judge Howard Tallman said he realizes the “result is devastating for the debtor.”
The Arenas’ case is at least the second bankruptcy involving a marijuana business tossed out of bankruptcy court in Colorado. At least two others have been dismissed in California.
Tallman made a similar decision in a 2012 case involving Rent-Rite Super Kegs West Ltd, a company that operated a warehouse partially rented to a tenant engaged in cultivating marijuana.
“Violations of federal law create significant impediments to the debtors’ ability to seek relief from their debts under federal bankruptcy laws in a federal bankruptcy court,” Tallman wrote in the Arenas’ decision last month.
Arenas, who couldn’t be reached for comment, has appealed the decision to the U.S. 10th Circuit Court of Appeals in Denver.