'You Have To Know Who To Talk To!' And Other Key Takeaways From The BZ Cannabis Hour
Cannabis business loans are extremely difficult to find. However, lending pros like Judy Rinkus are hustling every day to help entrepreneurs and early-stage startups achieve that next level of growth.
This week, Rinkus was a guest on the Benzinga Cannabis Hour (video embedded below).
Pot purveyors, at any stage of their career, would be wise to tune in and hear what she had to say.
'We're Very Busy'
When Michigan legalized recreational cannabis in 2018, Rinkus' former borrowing clients called her up.
"We want to invest in the industry [but] can't find senior secured loans," they told her. "We got the equity, but can't find the other piece of the puzzle."
On this week's show, Rinkus recalls how she transitioned from a banking career — with the likes of FirstMerit, Bank of America and PNC Bank — to cannabis lender extraordinaire.
"Banks, for all intents and purposes, really aren't lending into this industry," she told me and fellow Benzinga Cannabis Hour host Patrick Lane.
Since it passed in September 2019, the SAFE Banking Act has stalled in the Senate. Even if it goes through, "it'll take a while" for banks to come around and begin lending to cannabis businesses, Rinkus predicts.
So, in the meantime, "you kind of have to know who to talk to," she said. "And that's where I come in."
Her firm, Seed to Sale Funding, has done 10 transactions in the past year. They've ranged from $500,000 to $6 million, and she currently has over $100 million and 20 deals in the pipeline.
"So we're very busy," she said, citing 20 sources of secured debt, citing a bank and various private sources, including private funds, family offices and other backers that typically "fly under the radar."
"It's really been so much fun," Rinkus said of the past 18 months. "I personally love learning about new industries and I love the idea of helping to create an industry — that's like a once in a generation opportunity."
Barrington Rutherford; Cresco Labs SVP, Real Estate & Community Integration
These days, it's not enough for cannabis companies to just produce great products. One multi-state operator determined to do more is Cresco Labs Inc. (OTCQX:CRLBF).
Rutherford is at the helm of the company's various initiatives when it comes to social justice and equity programs.
"We have created the SEED Initiative, and we believe that this is the truly groundbreaking and most robust social equity program in the cannabis industry," Rutherford said on this week's show.
Cresco supports restorative and social justice agencies, and programming that includes expungement events.
"The overarching goal of the SEED Initiative is to create tangible pathways for people who've been most negatively impacted by the war on drugs," Rutherford added.
Other goals include creating onramps to the industry, diversifying workforces and helping communities access "the wealth that's being created by the end of cannabis prohibition."
Joe Caltabiano; Cannabis Entreprenuer, Co-Founder Cresco Labs
Caltabiano, who worked with Rutherford at Cresco, is now on the hunt for his next cannabis adventure.
After exiting the Chicago-based company in March, Caltabiano has been analyzing the space and looking for the perfect place to bring his expertise.
On the show, he discusses trends he's seeing, the "next evolution" of MSOs and what cannabis companies should be aware of for the second half of 2020 and beyond.
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