Receivership

Receivership is typically initiated by a secured creditor (or sometimes a co-owner in a business dispute) petitioning a court to appoint a receiver when a borrower defaults or a business becomes unable to operate viably. The receiver takes operational and/or possessory control, and in real estate and cannabis contexts is frequently tasked with marketing and selling the asset under court supervision, with the sale requiring court approval rather than closing on ordinary market terms.

Michigan cannabis receiverships carry an added layer that conventional commercial receiverships don't: because cannabis licenses aren't freely transferable, a receiver selling a licensed operation typically has to coordinate the real estate sale with a separate CRA-approved license transfer or reissuance process, and buyers should expect the closing timeline to run on the license approval calendar as much as on the real estate closing itself.

For a buyer, receivership sales can offer below-market pricing but come with real diligence complexity — court-approved sale procedures (sometimes with an overbid or auction process), limited or no seller representations, and potential liens or claims that need to be resolved through the receivership itself. This is exactly the category of transaction that has driven a meaningful share of recent Michigan cannabis facility turnover as overleveraged operators have exited an oversupplied wholesale market.