The cannabis industry is growing by the day as more and more states pass regulations allowing for the sale of cannabis. This is great news for aspiring business owners who want a piece of the action. However, despite the fact that medicinal and recreational use of cannabis is legal or decriminalized in most states, federal bans are still in place, which creates numerous difficulties for Marijuana Related Businesses (MRBs).
If you’re looking for cannabis business loans, traditional funding options are usually out of reach. However, this is no reason to worry, since other ways to fund your MRB are available. Keep reading to discover the ins and outs of cannabis company financing and how to obtain it.
How do cannabis companies get funding?
Although you may expect banks to follow the wave of decriminalization and offer budding MRBs with more growth opportunities, this is unfortunately not the case. Even if cannabis is legal in your state, all cannabis-related transactions are still seen as illegal at the federal level. This is why financial institutions that are federally insured are prohibited from lending to businesses in the supply chain. It also means that you’ll need to explore other possibilities.
You can start by researching two funding options:
- With equity financing, you’re selling shares of your business to the lender and getting money in return. The lender’s investment is paid back through dividends. It’s only available to companies that are already in business and garnering profit.
- Debt financing, on the other hand, means you’re taking out a loan that you’ll be repaying later on, with interest. This is the most popular method used by new MRBs.
How to get investors for a dispensary?
As the cannabis industry gains momentum, more and more investors are becoming interested in putting their money in booming businesses in the field. If you’re managing a dispensary, you should create an elaborate business plan to boost the likelihood of attracting potential investors. Here are some ideas to use if you’re not sure how to find them:
- Show up at industry-relevant events: Attend seminars, conventions, and other events that connect the professionals in the industry. If you mingle with the right crowd, the chances are you’ll hear of or meet investors who are interested in working with you.
- Take advantage of business directories: Get the word out about your business by using online MRB directories, where investors often browse for new partners.
- Use online resources: Social networking sites are a great place to start developing your brand and connecting to potential investors and clients. Join groups and forums that are specifically geared toward cannabis businesses.
- Talk to people who’ve already been there: Ask other professionals you know how they’ve obtained funding. They could put you in touch with their investors.
How can I get access to helpful cannabis business loans?
Are you an ambitious entrepreneur searching everywhere for the right financing solution? Though you may have a harder time obtaining funding than professionals in other industries, with proper support of experts in MRB banking, you will find a suitable avenue to advance your company. If you contact Confia, a dependable banking network that assists cannabis businesses, you’ll get all the necessary financial resources to grow your brand.
We understand the industry-specific obstacles you encounter as an MRB. Our system of holistic financial services has been designed to overcome these hurdles directly. Our services include streamlined banking capabilities, integrated API compliance, dependable methods of securing financing, and competitive fees.
We’ll be your trustworthy ally throughout your journey. Reach out to us today to start your climb to the top.