Marijuana Links Make GrowCo Bankruptcy Illegal, DOJ Says

A Denver-based greenhouse owner’s Chapter 11 bankruptcy should be thrown out because 95% of the company’s debts are linked to marijuana, the Justice Department’s bankruptcy watchdog says.

GrowCo Inc. and “the bulk of its creditors” were involved in the marijuana business, which violates the Controlled Substances Act, the U.S. Trustee’s Office said Wednesday in a filing with the U.S. Bankruptcy Court for the District of Colorado.

“This is not the type of case that belongs in federal bankruptcy court,” the U.S. Trustee said.

The government’s motion to dismiss the case came the same day that Judge Joseph G. Rosania ordered ...