The California cannabis market is truly struggling all the way around. Cannabis businesses and those who work with them closely face mounting financial pressure. Because of the credit crunch in California cannabis, the state and various impacted distributors and brands are taking steps to help shore up the issues created by cannabis companies that can’t (or sometimes won’t) pay their bills. Given the state of the overall industry right now in most locales, it wouldn’t shock me if other states and industry trade groups follow suit with California.
Cannabis regulators may step in
First, California is seriously flirting with the passage of AB 766. It would be something new for a state cannabis regulator to take action over B2B commercial dealings of this nature. Failing to pay bills when due (other than tax) usually isn’t going to amount to an actionable regulatory violation where you can approach regulators for help. AB 766 would change this in the Golden State. The bill summary provides:
This bill would, except as specified, require a licensee to pay for goods and services sold or transferred with a total value of at least $5,000by another licensee no later than 15 days following the final date
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