Cannabis Financing for Retail, Commercial and Industrial Businesses

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Contributor, Benzinga
January 3, 2023

The growth, sale, and distribution of marijuana is a burgeoning industry, and many business owners are capitalizing on this opportunity. But if you want your business to expand, you’ll need an influx of working capital to help you hire new workers, develop new product lines, or make other investments. Unfortunately, cannabis financing isn’t as easy to come by as other types of business loans. 

If you’re a cannabis business owner, this guide can help you gain access to the financing you need for your business to flourish.

How Do Cannabis Businesses Obtain Financing?

The profits of your cannabis business can be reinvested into your company, helping you make adjustments to your business model as you grow. But to make large-scale changes, you’ll need business financing to cover the cost of commercial real estate, inventory, equipment, payroll, or other essential needs. Consider the following best practices to help secure the cannabis loans you need to fund your business.

1. Update Your Business Plan

There’s a good chance you created a business plan when you first launched your company. But if you’re seeking new funds for your business, it may be time to revise and update that plan to reflect your new goals.

For example, you might update your business plan to include:

  • New product lines
  • Changes in your leadership structure
  • Revisions in your marketing strategy
  • Specific funding needs

Most cannabis lenders will want to evaluate your business plan before approving a loan. Having a revised business plan that reflects your future goals can demonstrate your strategy for the future and improve your chances of securing cannabis financing.

2. Find a Lender Who Offers Cannabis Financing

Despite the growing acceptance of the cannabis industry, most traditional banks and lending institutions do not offer loans to cannabis business owners. The U.S. Small Business Administration (SBA) does not offer loans to cannabis businesses either.

The good news is that you can choose from non-traditional lending options. Most lenders will expect to see your business plan, as well as the financial records of existing businesses. They’ll also perform a thorough credit check to determine your eligibility for financing. Gathering your financial documents together prior to meeting with your lender can streamline the process.

Even though cannabis lenders are hard to come by, comparing rates and terms from at least three lenders still makes sense to ensure you get the best possible deal.

3. Make a Plan to Repay the Loan

Your business plan should already include some basic revenue projections, but you’ll also need to think about the future to ensure that you’ll be able to repay the loan in addition to any interest.

It’s important to borrow only what you need; otherwise, you can find yourself saddled with an unmanageable amount of debt that can inflate your overhead costs and cripple your ability to expand.

4. Consider Alternative Funding Sources

Cannabis lenders aren’t the only way to fund your business. As an entrepreneur, you might also consider funding sources such as:

  • Crowdsourcing
  • Social equity lending programs (reserved for disadvantaged entrepreneurs)
  • Credit cards
  • Building partnerships with angel investors

These sources vary when it comes to effectiveness, but they might be a good way to supplement the cannabis business loan you receive through your lender.

Advantages of Financing for Cannabis Businesses

Every entrepreneur understands that it takes money to make money. Cannabis financing can provide the working capital you’ll need to maintain and grow your business. Here are just a few of the advantages of pursuing financing for your cannabis business.

Fund New Needs

Cannabis business owners will regularly be on the lookout for ways to expand their business and pursue new revenue streams. Cannabis loans give you the working capital to accomplish such goals as:

  • Purchasing new inventory
  • Updating existing equipment
  • Obtaining new licenses
  • Developing new vendor partnerships
  • Hiring new employees

Focusing on these priorities can help you refine your business strategy and carry your cannabis business into the next phase of its operations.

Maintain Your Cash Flow

Cash flow refers to the money that moves into — and out of — your business at any given time. A business loan improves your cash flow in the short term, giving you access to the money you’ll need to cover your ongoing expenses, such as payroll and taxes.

Expand Your Business

How do you plan to grow your business? Business loans can be used to make capital improvements, hire new employees or invest in research and development to take your business to the next level. The funds give you a chance at greater profits and keep your business thriving for years to come. Canna Business Resources (CBR) provides instant approval equipment financing for cannabis equipment and other business-related expenses.

Considerations with Cannabis Financing

As a business owner, you’ll have to consider a few factors when you obtain a loan. Here are some of the most important things to keep in mind.

Interest Rates

Since cannabis loans can’t be obtained from a traditional lender, interest rates may not be as competitive as other lending options. This factor is why it’s important to compare interest rates between multiple lenders to secure the most affordable financing.

Loan Types

Financing solutions don't always come in the form of a lump-sum loan. A business line of credit can give you access to funds up to a certain amount, which you can then pay off, much like a consumer credit card. This method can be a way to stay flexible if you’re unsure of your financial needs. Canna Business Resources offers licensed operators and supporting businesses fully uncollaterilized working capital financing.

Penalties and Fees

Most lenders will charge a fee for late payments, but some will charge a fee if you attempt to pay your loan off before the expiration date. Others will charge an origination fee, which can drive up the final cost of the loan. Make sure to ask about these fees before you commit to a lender.

Tap into a Growing Industry

According to the U.S. Securities and Exchange Commission (SEC), cannabis business owners earned over $12 billion in revenue in 2019, a number expected to increase to $31.1 billion by 2024. Cannabis financing options can help you gain traction in this lucrative industry and keep your company growing.

Frequently Asked Questions


What is a cannabis loan?


What can you do with a cannabis loan? This type of business financing is offered by non-traditional lenders and can be used to cover the startup, operating costs and business growth of a cannabis-related business.


Can a cannabis business get a credit card?


Are cannabis businesses eligible for credit cards? At present, no. Traditional financial platforms have been reluctant to get involved with the cannabis industry. However, SuperNet recently introduced a credit card platform for use in dispensaries. It’s currently restricted to parts of California but shows potential for cannabis businesses.


Does the SBA finance cannabis businesses?


Can cannabis businesses get SBA financing? Cannabis companies are excluded from receiving SBA funding, which pushes cannabis business owners toward alternative funding sources.