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Cannabis Business Loans: Your FAQs Answered

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The world of cannabis financing is complex and ever-evolving. It’s nearly impossible to keep up with rapidly changing regulations, and one misstep could land you in dangerous territory. 

Despite the challenges, cannabis business loans are a necessity for almost all businesses operating in the industry. So if you’re thinking of opening a cannabis business, you’ll need to familiarize yourself with the processes and rules surrounding marijuana financing.

In this article, we’ll answer some frequently asked questions to get you started on the right foot. Keep reading to learn more about cannabis business funding.

Can I Get a Bank Loan for my Cannabis Business?

The answer to this is a bit complicated.

While most other American businesses can get a bank loan to fund their operation, cannabis businesses face additional hurdles that prevent them from accessing traditional financing options. 

Cannabis is still not legal at the federal level, and since banks are required to stay compliant with federal regulations, it makes it difficult for them to fund cannabis businesses. Getting insurance for a cannabis business is equally complicated. 

The short answer to the question is: no. Until cannabis is legal at the federal level, banks will typically not issue loans for marijuana businesses. Exceptions to this include businesses that can afford to pay the banks significant fees that cover the costs associated with the risks of working with marijuana businesses. 

In recent months, the SAFE Act has been making headlines in the cannabis industry. This act would allow banks, insurance companies, and other financial service providers to provide funding and services to legal cannabis businesses. While the US House of Representatives is making progress on the SAFE Act, it has faced a number of roadblocks and continues to move slowly. 

How to Get a Cannabis Loan for Equipment

Cannabis equipment loans can be secured from private lending companies. These loans can finance up to 100% of cannabis equipment for legal and licensed dispensaries, manufacturing plants, growing facilities, and more.

How to Get a Cannabis Loan for Property

Cannabis property or real estate loans can also be secured through a private lending firm. These asset-backed loans require some collateral on the part of the business. 

Examples of collateral include: 

  • Equipment
  • Other property
  • Crops
  • Inventory

What Are the Best Ways to Get Cannabis Funding?

Since securing cannabis financing through a bank isn’t always possible, business owners have to get creative and find other ways to fund their businesses.

Here are a few possibilities:

  • Find a private lender: these lenders still need to meet stringent regulatory requirements, and not all of them are ideal. For this reason, it’s important to vet your lenders by reading reviews and asking plenty of questions. Cannabis lenders in Qredible® are committed to trust and transparency, so that’s a great place to find a reliable option.
  • Leverage your network: friends, family, and professionals in your network make ideal investment partners for many smaller cannabis businesses.
  • Try crowdfunding: in addition to the above options, you could try crowdfunding to raise money for your cannabis business. Platforms like Indiegogo and Kickstarter have helped many dreams and ideas turn into full-fledged businesses. For cannabis-specific crowdfunding platforms, consider CannaFundr and Fundanna.

Streamline the Cannabis Business Loan Process With Qredible®

One of the biggest hurdles for cannabis business financers is the regulatory requirements associated with cannabis loans. 

Funding bodies need to prove that every business they finance is fully legal and compliant with all relevant regulations. This is no easy task, especially as regulations are constantly changing. The cost of compliance monitoring is steep, never mind the amount of time and effort that goes into the continual monitoring of an entire portfolio of businesses.

That’s where Qredible® comes in.

Qredible is the cannabis industry’s first and only digital registry of validated and verified brands and businesses associated with the legalized cannabis, CBD, and hemp industry. 

But Qredible does more than just that.

In Qredible, you will have the ability to prove your compliance with groundbreaking technology that validates licenses, verifies COAs, and demonstrates your compliance with all relevant regulations.

The best part? It’s affordable. Businesses can access it all for less than the cost of a latte a day.

If you’re ready to get started, contact us today to set up a discovery call with a member of our sales team.

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