United Cannabis Bankruptcy Axed After DOJ Argued Pot Illegality

A bankruptcy court in Colorado threw out United Cannabis Corp.'s Chapter 11 case, finding “good cause” to grant a Justice Department motion to dismiss based on the company’s ties to marijuana.

Judge Joseph G. Rosania Jr. of the U.S. Bankruptcy Court for the District of Colorado on Wednesday sided with the U.S. Trustee in a one-page order. The DOJ’s bankruptcy watchdog had pointed out that the drug remains illegal under the federal Controlled Substances Act despite an increasing number of states authorizing its use for medical and recreational purposes.

The company argued that its case should continue because its products ...