December 18, 2018

Colorado Court of Appeals: Courts May Only Appoint Receivers for Marijuana Businesses who are Licensed Under Marijuana Code

The Colorado Court of Appeals issued its opinion in In re Marriage of Yates on Thursday, March 8, 2018.

Dissolution of Marriage—Receiver—Colorado Medical Marijuana Code—Retail Marijuana Code.

Petitioner-Appellee Yates filed a petition to dissolve her marriage to respondent-appellee Humphrey. She requested the appointment of a receiver over marital property, which included marijuana businesses. A number of these marijuana businesses were licensed medical and recreational marijuana entities. The court appointed Sterling Consulting Corporation, including its principal Richard Block, as the receiver. When the court entered the receivership order, neither Block nor his employees held the licenses required by the Colorado Medical Marijuana Code and the Colorado Retail Marijuana Code to own, operate, manage, control, or work in a licensed marijuana business.

After learning of the receivership order, the Colorado Department of Revenue, officially acting as the State Licensing Authority (SLA), moved to intervene and modify the receivership order by removing the receiver, at least until Block and his employees obtained the requisite licenses. The court granted the motion to intervene, but denied the motion to modify.

On appeal, SLA challenged the court’s authority to appoint receivers who are not licensed to operate marijuana businesses. A district court may only appoint a receiver for a marijuana business who complies with Colorado’s marijuana licensing laws.

The order appointing the receiver was reversed and the case was remanded with directions.

Summary provided courtesy of Colorado Lawyer.

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