There have been some substantial changes in the last few years regarding how the state of Oklahoma treats the use of marijuana. For example, the Governor of Oklahoma has helped to make legal the use of some THC cannabis oil for the treatment of epilepsy. To be considered legal in the state of Oklahoma, the THC oil must be no more than .3% THC. Legislation in the state of Oklahoma also allows marijuana products that are supported by medical studies. With CBD oils legalized, the Governor of Oklahoma is also in the process of attempting to legalize marijuana.

Despite the legalization of CBD oil in Oklahoma, marijuana is still prohibited at a federal level. As a result, the federal government still lists marijuana as a Schedule I drug. This clash represents just one of the many contradictions between how state and federal law treat marijuana. A recent decision made by the federal government has had a significant impact on the rights of some marijuana-based businesses in the state that declare bankruptcy.

The Recent Bankruptcy Court Ruling

In a recent ruling, the United States Department of Justice issued a statement to inform business owners that marijuana-based businesses are not able to obtain bankruptcy protections.

In 2017, the Director of the Justice Department encouraged bankruptcy trustees to report violations of federal marijuana laws if these were noticed to occur among businesses. As a result, the Justice Department initiated legal actions against companies like Enron that had had some business operations engaged in marijuana.

When state and federal laws contradict one another, the United State Constitution’s supremacy clause comes into power. In short, federal laws are given precedent over state laws. This recent decision means that marijuana based business who sell THC oil in the state of Oklahoma are not afforded bankruptcy options.

What are Bankruptcy Protections?

There is a very critical distinction to be made between bankruptcy protections and bankruptcy. Bankruptcy refers to when a person is unable to pay his or her debts while bankruptcy protections refer to the various shelters that are made available to a person who has filed for bankruptcy. The following protections for each type of bankruptcy are available to people:


  • Chapter 7 Bankruptcy: There are certain types of property that is exempt from repayment of debts including financial interests in homes and motor vehicles, health aids, and household items up to $8,000.
  • Chapter 11 Bankruptcy: Businesses most often file for Chapter 11 bankruptcy. Personal assets are protected under Chapter 11.
  • Chapter 13 Bankruptcy: A person’s home is protect from foreclosure in Chapter 13 bankruptcy.


Bankruptcy law also has protections for family farms, family fishing businesses, and various other types of assets. It is important, however, to remember that in accordance with the new Department of Justice rulings, businesses that sell marijuana lose these protections.

Speak with a Bankruptcy Lawyer Today

Many people are overwhelmed and confused about the various steps that are involved in the bankruptcy process. If you need the assistance of a bankruptcy law in Oklahoma, you need someone who has the skill and experience to minimize the number of obstacles that occur in your case. Contact attorney Jim A Lyon today for assistance with your bankruptcy case.