No Bankruptcy for Medical Marijuana Businesses
In the United States, the right to file for bankruptcy was established in the Constitution. Specifically, Article I, Section 8, clause 4, known as the Bankruptcy Clause, authorizes Congress to create uniform laws on Bankruptcy that are applicable throughout the United States. This law, and the ability to file bankruptcy was very important to the framers of the Constitution because it was an alternative to the archaic practice of putting people in debtor’s prison.
While debtor’s prison still existed in the United States for some time after the ratification of the Constitution, by the 1830s, the states that had debtor’s prisons were drafting legislation to minimize their presence. One of the reasons this was important was because, when people are willing to take economic risk and start a business, both the economy and the strength of the nation grows, and these were very important goals during the industrial revolution. If you didn’t have to go jail if your new business failed, you were more likely to take risks, and that is what many people did.
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