STEPS TO START A CANNABIS BUSINESS
CategoriesBUY/LEASE Cannabis INVEST/FINANCE

5 Steps to start a cannabis business in Michigan

Marijuana was recently legalized in Michigan, and we are still about 12 months from having any recreational marijuana facilities in the state. By legalizing marijuana for recreational use, Michigan joins 10 other states and the District of Columbia as the only recreational states within the U.S.

The cannabis industry has been growing at a rapid pace since legalization began. First with medicinal legalization and now with recreational, the cannabis market seems poised for even more growth in the coming years. Michigan is expected to be one of the largest marijuana business markets in the country. Some experts even believe it will be second only to California. The potential in the marijuana industry has attracted a lot of new faces to the industry, you may be one of them. The purpose of this article is to give newcomers a brief introduction into the industry by letting them know what steps they need to take to get a cannabis business started in Michigan.  Before we jump into the steps please review these facts about the cannabis industry in Michigan.

  • Marijuana business opportunities have plenty of options from producers, processors, provisioning centers, testers, and secure transporters.
  • Michigan regulations contain stipulations that require potential applicants for a recreational license to first hold medical cannabis licenses..
  • Michigan will have new licenses like the microbusiness licenses available for application when the recreational law is written.
  • Michigan also will allow for home grows for personal use.
  • Michigan has allowed cities to opt-out or in to legalization on a city by city basis.  

Here is 5 step guide about initiating cannabis business.

Infographic

Step 1: Register business in Michigan

In order to initiate your cannabis business in Michigan, you must register an entity with the Department of Licensing And Regulatory Affairs (LARA). As with many other licensed businesses you should complete any application for a marijuana license in the entities name. After you have established your business with LARA you can begin the application process for any of the below licenses with the state:

  • Cannabis retailers
  • Cannabis wholesalers
  • Cannabis processors
  • Cannabis producers
  • Medical cannabis dispensaries
  • Medical processors.

You will also need the following licenses and permits to run your marijuana business :

Make sure you renew your registration every year before the present registration expires..

Step 2: Get your local cannabis permits and licenses.

Filling the sufficient documents with the state is not enough. In order to operate your business in a municipality, which will require municipal approval. Municipal approval also entails a seperate application process. Different licenses have different different requirements and it is important that you contact a professional to assist you with your application.

Step 3: Obtain Required Cannabis State License

Steps two and three are interchangeable and you can pursue state licensing before city or vice versa. The state license in Michigan will be required, and some cities require proof of a state application before they will even review your city application. A state license is required for any type of cannabis business to operate in Michigan.

Step 4: Determine your Tax Obligation

There are various taxes involved for Cannabis business. When organizing a business invest time by researching upcoming tax responsibilities. Michigan like other states requires that cannabis businesses pay an excise tax. This tax is something you have to disclose when applying for your IRS Employer Identification Number. Additionally, taxes will be levied differently depending on what type of business you operate. An example of this is provisioning centers are taxed differently than cannabis growers are, as such you should consult a qualified accountant to assist you in determining your tax liability.

Step 5: Anticipate Ongoing Business Registration Requirements.

The list of licensing, registration and compliance does not end here. On top of entity registration and renewals, every state and city issued cannabis license will require a yearly renewal for a set fee. You need to make sure you are prepared for these fees and understand when you need to file your paperwork. Reminders by the state and city will be sent, however we still recommend that you enlist the services of a professional when dealing with such matters.

In Sum

It is important to understand that these five steps are not all the considerations you need to take into account when starting your cannabis business, and is intended as a brief introduction into the bare minimum required when starting a new cannabis business. We highly recommend that you consult with a professional who can let you know if it is worth your time, energy, and money to get into the cannabis industry. You should understand that the journey from the beginning of the process to an up and running marijuana facility will be long and intrusive. You should be ready to lay your history out like an open book and have it examined thoroughly before you can proceed to licensure which will be the first step to starting a cannabis business in Michigan.

CANNABIS BUSINESS
CategoriesBUY/LEASE Cannabis INVEST/FINANCE

TO FIND THE BEST LOCATION FOR YOUR CANNABIS BUSINESS

Finding the right location for your cannabis business can be very tricky especially if you are new to this business. It requires a good amount of research and some knowledge about city layouts. Today we are going to look at how we can find the best location for your prospective marijuana business.

Now before we dig deep into this matter lets look at some important facts about the Cannabis business and what are the start-up requirements.

•    The Research

Cannabis businesses are dictated by not only state law, but also municipal codes, ordinances, and laws. As a prospective business owner the easiest way for you to navigate these laws and get this research done is to hire a professional. There are many attorneys and real estate agents and brokers that deal specifically with marijuana that stand ready to assist you. For choosing a destination for your business you want to make sure that you research the city code to ensure that they allow medical marijuana facilities within their city limits. After you have confirmed that they allow marijuana facilities, you want to see where specifically those facilities are allowed. Usually, cities allow different types of facilities in different areas of the city. For example, marijuana grow facilities are almost always relegated to industrial zones, whereas provisioning centers are allowed in more traditional business settings.

Now that you have found a property in the specific zoning area where your business is allowed to be do you need to do any more research? the short answer is of course! In addition to zoning restrictions every city that allows a marijuana facility also requires mandatory setbacks from other establishments like churches, schools, parks,…etc. You will need to confirm the building you have selected complies with these setback requirements or your business will not be allowed to operate. You also need to consider parking, most cities require you to have parking sufficient to cater to your expected business. This means that in addition to all the above requirements you have to make sure the property you select has either a private parking lot, ample street parking, or land on the property that can be converted into a parking lot.

•    The Application

It is always better to speak to the local real estate professionals and attorneys before trying your hand at a marijuana application. For the sake of sticking with the topic of this article we will discuss only the municipal application process. In Michigan the application process is different from city to city. Some cities allow multiple applications on the same property, while others only allow one at a time. This is a very important distinction for you to know since you are a prospective cannabis business owner. For those cities that allow multiple applications on the same property, your application will usually be compared “apples to apples” with the other applicant, with the victor being the one that offers the most contribution by having their business approved. Additionally, all city applications charge a fee, which is non-refundable even if you are denied.

City applications also have different requirements for what you need to qualify for a cannabis business license. For example, in the city of Detroit you are required to show financing in the same amount and kind as you would with your state application. Whereas with other cities all that is required is showing that you are currently in process of acquiring a state license. These requirements are integral to knowing where you will locate your cannabis business because you could save valuable time and money and focus your efforts on the finding a suitable property as opposed to getting lost in the weeds.

•    What is Next

After you think you have found a suitable property you want to find out what kind of market for cannabis use or sale you are dealing with. All successful businesses take into account what percent of the market they will make up. In your case whatever cannabis business you choose to open, you should know not only how many others like you are in the area, but also how many are currently applying for locations in the area. Depending on whether you are one of the first in the area or really late to entering the area can make a huge difference as to whether this is actually the best location for your business. Additionally, some new cannabis business owners will have a unique approach to their specific business, like an Apple store themed dispensary that has become a state-wide chain in California, or vertically integrated facilities that are an all in one shop.

Finding the right location for your cannabis business is about a lot more than just the actual physical location. You need to consider  If this is your first time trying your hand at a cannabis business it is highly advisable that you hire a professional to assist you in completing this process. You will save yourself time, money, headache, and much more by working with someone who knows what to do in the aforementioned situations.  Speaking of marketing you want to ensure that your location is easy to find and you are able to get advertisements set online with dedicated cannabis sites like WeedMaps and Leafly which can, in turn, also help customers discover your facility.

CANNABIS LOANS
CategoriesBUY/LEASE Cannabis INVEST/FINANCE

The Complete Beginners Guide to Cannabis Loans.

The cannabis Industry generated a good amount of revenue in 2017 and 2018. Some estimated that the market was between about $9-$18 billion and they expect that it will double by 2020. The marijuana business is booming and this sector is expected to grow exponentially, while this sounds like an attractive opportunity, many of the most qualified people are locked out of the market, because they cannot afford to stake out their own claim. As most of you know one of the most important factors when starting a new business is finances. Without adequate financing your business could hit the ground before you have had a chance to really implement a business plan.  

The most difficult part about procuring adequate finances for a marijuana business is the fact that traditional lenders will not finance your business. Other businesses even ones with a rate of return much lower than marijuana will secure financing before your marijuana business. The main problem with lending in the marijuana industry is the fact that it is still federally illegal. Michigan has legalized marijuana medically and recreationally, however, traditional banks and lenders in the state still will not lend a hand to your marijuana business. If you are looking for a way to secure a capital contribution/investment to start your marijuana business you are reading the right article. This article will explore the financing options available to the still infantile marijuana market and how you can secure funding in a national banking system that does not support marijuana.

Obtaining funds for any business, most of all marijuana businesses can be an incredibly difficult task. You need to find a lender that offers you a rate that you are able to pay and a loan of the right amount. This is difficult since lenders, even those in the marijuana industry consider, marijuana businesses high risk. However, as the marijuana industry becomes more prevalent and regulated loans and investment opportunities should become more viable and easier to secure.

Options for funding cannabis businesses are limited but there are options. Whether you are a marijuana grower, provisioning center, processor, tester, or transporter you need funds to start your business. This article will explore the following funding options available to you currently in the cannabis industry.

  • Cannabis Commercial Real Estate Loans
  • Cannabis Leasing Equipment Loans
  • Hard Money Loans
  • Cannabis Business and Startup Loans

Cannabis Business and Startup Loans.

A cannabis business and startup loan is exactly what it sounds like, a loan that helps you start up your business. However, since the marijuana industry is still federally illegal, you cannot go to your local bank and take out a cannabis loan. This means you will have to work with companies that already work in the cannabis industry. These companies that are already lending in the cannabis industry set the market for what a start up loan can look like. In order to secure the most amount of financing from these lenders and private investors you need to have a very well put together pitch, by this we mean a legitimate business plan, and real figures based on estimated sales and costs. You will also need to demonstrate that not only are you capable of holding the marijuana business license you are applying for, but also you are in the process of completing the applications necessary for those licenses. If you pitch your business correctly you could secure the financing necessary to open your business.   

Hard Money Loans

Hard Money is a short-term bridge loan. Usually, hard money loans are secured by real property. Hard money loans typically have higher interest rates than traditional business loans, because they usually involve higher risk and a shorter repayment period. Additionally, hard money loans are issued by private lenders or investors they are able to be used by marijuana business owners. The benefits of a hard money loan when compared to traditional loans is the speed with which they can be issued, where traditional loans would take weeks or months to get set up, a hard money loan can be approved in a matter of days. A short turnaround time is important in the marijuana industry because with a marijuana business securing financing especially during the application process is necessary to get your business licensed. This option is good if you cannot secure any other means of financing.

Cannabis Real Estate Loans

For those marijuana business owners who can afford to self finance the operation but need help with purchasing, leasing, or building out an existing property cannabis real estate loans offer a viable avenue for funding. Private real estate money lenders will support you by offering the capital investment you need to get your business a physical location or the construction funds necessary to get your business started. Cannabis business owners could also use real estate loans to acquire start up capital if the lender agrees to such an agreement.

There are many cannabis real estate lenders that offer a diverse and creative investment strategies for your marijuana business. It is up to the business owners to choose right investor for their business. There are even real estate lenders in the cannabis industry that have tried to replicate the traditional real estate loan, and offer you a loan, secured by assets and title to the property in exchange for their lending you the capital you need. However, the cannabis industry is still new in Michigan and while such real estate loans carry a high interest rate now, as the risk goes down so should the rates, making this option much more realistic for many more prospective marijuana business owners.

Cannabis Equipment Leasing

Cannabis equipment leasing loans are loans that give marijuana business owner the option to purchase any type of equipment essential for their business. Especially in marijuana grow and processor facilities, your business will need equipment in order to generate income. While the red tape around lending to marijuana businesses is still in play, equipment financing loans allow you to utilize lender capital to secure the machinery, equipment, and supplies necessary to get your business up and running. As with other loans discussed, the risk involved typically means that this type of financing will involve a high interest rate. Funds made available through private lenders or investors and are available to cannabis growers, extracting companies, medical dispensaries, and seed producers so they can obtain high-quality equipment for their business.

Summing Up

Marijuana is still considered illegal on the federal level, as such traditional financing methods are not available to prospective and current marijuana business owners. Alternative lenders are a solution to the problem of finance in the cannabis industry. The above discussed methods are some of the best options available in the current marijuana market. They allow you as a marijuana business owner to secure financing for whatever your goal is and more importantly whatever stage of your business plan you are in. As with securing investments and loans with any other business make sure to do your due diligence and shop around, so that you ensure you are receiving the best possible deal for your marijuana business.

Insurance for Cannabis Companies
CategoriesCannabis INVEST/FINANCE

Types of Insurance for Cannabis Companies

Marijuana is getting legal status in many states in the USA. As with any legal and regulated business, marijuana business owners need insurance. However, just because you need insurance does not mean you can get insurance. Currently, many traditional insurance companies will not issue insurance policies to marijuana businesses.  

New marijuana-specific insurance companies have risen to meet the demand for insurance in the industry. The marijuana industry like other industries needs protection against any risks like financial help in case of loss, theft, damage to property, or equipment. This article will discuss what we believe are the 7 types of cannabis insurance you should consider for your marijuana business.

Factors to consider before taking insurance

Risks in the business

There are different risks associated with different marijuana businesses. If you are a marijuana grower, you will not need the same insurance as a provisioning center. Therefore, it is important to understand the risks associated with your business, in order to adequately insure your business. The right type of insurance will protect your business from the losses associated with your specific marijuana business.

Take recommendations

While you may know a lot about the risks involved in your marijuana grow, provisioning center, processing, transportation, or testing facility, you probably do not know as much as licensed insurance professionals. Specifically, insurance professionals offering marijuana-specific insurance. Make sure to do your research before considering insurance, as well as shop around, but make sure you do take into account the opinion of a licensed insurance professional.

8 types of Cannabis insurance suitable for cannabis companies

  1. Commercial General Liability Insurance

Commercial general liability insurance is what most people think of when you say commercial insurance. It protects against exactly what it sounds like it protects against, the general hazards associated with conducting business. This type of insurance will be appropriate for any and all marijuana businesses. It gives protection to marijuana business owners against all general risks including potential damage to the property.

Commercial general liability insurance provides blanket coverage for potential claims for injuries to workers, your property, patrons, and much more. This insurance will protect your business from losses associated with conducting your business and is recommended for all businesses.

  1. Worker’s Compensation

Workers compensation insurance protects the employer in the case of an employee injury while in the workplace. This type of insurance is recommended for most businesses as an employee injury on company grounds could end up costing the employer a lot of money. However, some businesses like a provisioning center have little risk of on the job injury since there is not much physical labor or danger involved in the job description.

While it is always advisable to carry insurance to avoid the risk of a hefty payment later, there are ways around worker’s compensation insurance. In most other industries ways of getting around worker’s compensation insurance involves hiring your employees as independent contractors. However, this is not a catch-all solution and your relationship with your employees will be investigated to determine whether or not they actually meet the definition of an independent contractor. The best advice we can provide with procuring worker’s compensation insurance is that if you dictate your employee’s schedule and they are not sufficiently “independent” protect yourself with a worker’s compensation policy.

  1. Crop Insurance

This is the type of cannabis insurance is one we emphasize for marijuana growers. If there are any damages to the crops, the marijuana growers get the financial help. It also covers the risks facing crops from natural disasters such as heavy rain, drought or famine. While Michigan marijuana grows are primarily conducted indoors, you are still considered a “farmer” for lack of a better word. Not insuring your crop is just foolish. That would mean you as a grower would have absolutely no protection in the case of a loss. If the crop is your first crop, you could be risking the entirety of your business. Crop insurance is also applicable in the case of seeds and harvested crops.

  1. Vehicle Insurance

This insurance applies to many vehicles such as trucks, cars, and motorcycles. It provides the financial help in case of physical injuries caused by road accidents. This will be especially helpful to testing facilities and secure transporters. Driving in the United States is very dangerous and accidents happen very often. If your employees are operating company vehicles it is very important that your vehicles be insured against potential losses. Specifically, Michigan requires insurance and with our no-fault insurance laws, even one accident could cost you more money than you would care to spend.

Automobile insurance also protects your vehicles in the case of theft or damage. This insurance is highly recommended for an marijuana business that would have any vehicles. However, this insurance could be a bit harder to procure as traditional insurers are not going to insure vehicles associated with marijuana. Specifically, many traditional insurers consider marijuana too high risk, especially when in addition to vehicle and driver safety, the insurance company has to think about potential loss to high value cargo. Insurers in the marijuana industry have developed techniques to address, marijuana specific concerns and most of those techniques are focused on the minimization of exposure for the insurance company, which means capped policies.  

  1. Property Insurance

The 5th recommendation for marijuana business owners is  of property insurance. This type of property insurance would cover additional risks not covered by the commercial liablity insurance mentioned first. Property insurance can cover your property from a multitude of risks including natural disasters, internal failures, AC/heat, theft…etc.

Property insurance can act as a catch-all for those already carrying general liability insurance. While it may seem like overkill on top of general liability, property insurance can protect your business from very costly risks that are part of owning a property, but have nothing to do with your commercial practices.

  1. Cargo Coverage

The next on the list is Cargo Coverage insurance. This insurance really is relegated to those shipping their product around. Shipping in Michigan using trains or trucks can get dangerous, and as discussed earlier, auto insurance in the marijuana industry is generally capped. Therefore, as a business owner the capped policy may not protect the total value of the crop you are shipping. Cargo insurance offers the added protection to cover your entire shipment, and could even require less coverage from your auto insurance.

This insurance is recommended to large facilities that are constantly transporting large quantities of marijuana. The added cost in addition to your auto coverage is immensely valuable when considering the potential loss associated with even a single shipment loss. Total loss of a shipment could amount to hundreds of thousands of dollars lost. As such cargo insurance is recommended to those that can secure it.

  1. Equipment Insurance

This insurance is needed by marijuana growers and processors. Under this insurance, the marijuana owners get protection in case their equipment is damaged. Processors and growers use a lot of equipment in their facilities, especially larger operations. Some facilities depending on approach to growing and processing can have very expensive and intricate systems at work, as such insurance protecting the owners from loss of equipment is necessary to ensure the success of the company.

It is not uncommon for growers to be targeted for theft, this type of insurance also covers the equipment that is lost to theft. Under this insurance, the owners will get the repair expenses in the case of damage or replacement costs in the case of damage.

Equipment insurance and property insurance provides additional coverage and acts as a fail safe for anything that would not be covered by property insurance. Some insurers will offer equipment coverage as part of their property insurance policy.

Conclusion

Every marijuana business owners needs will be different according to what type of business they own. The above recommendations provide as complete a picture of what type of insurance is appropriate for each business as well as what each insurance offers protection against. These insurances will help the marijuana business owners conduct business in a safe and protected manner. Marijuana insurance is still a relatively new development, as recreational marijuana becomes more prevalent in the USA, we expect more insurers to enter the marijuana industry.

Cannabis Industry
CategoriesINVEST/FINANCE

Role Of Real Estate Agents In The Cannabis Industry

Nothing – not biotechnology, software, real estate, gold, aerospace, oil, smart phones, nothing…has seen a growth rate comparable to that of  medical marijuana. The market for cannabis is expected to grow to approximately $23 billion in the coming years. The market for recreational marijuana could be larger than the NFL, which hit $12 billion in 2015. Moreover, some sources have estimated that the cannabis market (recreational, medicinal, and hemp) could be worth over $100 billion by 2029. With such staggeringly high estimations many entrepreneurs have already staked their claim in the cannabis business.

Though many have been quick to jump into the marijuana business, not all of them have the required investment to be successful in the industry. Some people may have the time and money, but not the real estate. On the other hand, some people may have the real estate but not the capital investment to start the business. This is exactly where the investors come into the picture. Funding and investments in the cannabis industry is very similar to investments and funding in any other business. There are a variety of ways it can be done effectively. Some of the most common ways include funding for the first crop, real estate investment, refinancing the existing property, and many more. Let us have a deeper look into the business.

What is the role of real estate agents in the cannabis industry?

You may be wondering whether or not you really need a cannabis real estate consultant. After all the what does a cannabis real estate consultant do? The short answer is yes, you should have a cannabis real estate consultant, and those consultants do a ton of the leg work to get your property deal completed. For those selling properties, these agents help reduce the amount of time people might waste searching for buyers. Cannabis real estate agents can help sellers maximize the value of their property. Through their intimate knowledge of the cannabis real estate market, cannabis real estate consultants are better able to assess and evaluate deals on their clients behalf.

The professionals here at Michigan Cannabis Properties are experienced in the cannabis industry and commercial real estate industry. Having experience in both of these areas is crucial to not only the success of the company but also the success of our clients. Our brokers and agents are familiar with the state and municipal laws that dictate uses and restrictions on cannabis properties and potential cannabis properties. The experience and expertise brought to the table by real estate professionals in the cannabis industry is invaluable, and could help you tell the difference between a good deal and great deal.   

Role of commercial real estate in the cannabis industry

With cannabis now legalized in several states across the nation, the cannabis business has been growing rapidly. Retailers, distributors, manufacturers and growers will all require a space to carry out their business operations. Cities each have designated zoning for cannabis facilities within their borders. Land and property owners need to know exactly how their property is zoned, so they know exactly what their property can be used for. This is especially important for those property owners looking to sell or rent their property, since the value of a cannabis property will be dictated by what it can be used for.

Now, you may be wondering how the commercial real estate industry comes into the picture. In states where medical marijuana is legal, we have seen a sharp increase in prices of properties that are eligible for use as a medical marijuana facility. People are aware of the fact that there is money to be made in  marijuana. As such properties that can house marijuana facilities have dramatically increased in price. Cannabis properties are so in demand at the moment that many previously vacant and unwanted properties have become highly valuable investment properties. Since, there are lots of rules and regulations involved with acquiring, building, licensing…etc., it is highly recommended that you do not try to address these issues without the assistance of an expert in the area of cannabis real estate.

Where do real estate investors come into the cannabis industry?

There are many reasons for the involvement of a real estate investor in your marijuana business. There are also plenty of investors looking for an avenue into the industry.  Many real estate investors offer different ways for helping you get funding. Some could offer lines of credit, reduced property rental, or even traditional loans. While not all investors have the same ultimate goal, a common theme seen amongst investors is helping operators expand their market reach in the cannabis industry. After all depending on what kind of arrangement you make with an investor, your success as a cannabis business owner directly affects them. On top of these things, cannabis business real estate investors can help provide cannabis business owners with capital contributions that help the business owner acquire the required equipment for opening their cannabis facility.

What commercial real estate firms do with the medical marijuana business?

There are numerous companies that offer commercial cannabis real estate for sale. Such companies or agencies specialize in selling and leasing both commercial and cannabis eligible spaces located across the state. These firms give cannabis business owners the access to wide range of properties eligible for use as:

  • Provisioning centers
  • Grow warehouses
  • Safety and Testing properties
  • Processing Operations
  • Manufacturing properties and
  • Microbusiness properties

Cannabis entrepreneurs will see the benefit of using a real estate company like Michigan Cannabis Properties almost immediately. The real estate and law experts involved with these companies provide up to date knowledge and facts about the ever changing medical marijuana industry. With extensive field knowledge and a huge network of landlords and real estate brokers, these firms can offer access to the largest selection cannabis-related commercial real estate across the state. Most real estate companies will have a plethora of information on the medical marijuana market and that information will be updated on a daily basis.  So, if you or anyone you know is interested in jumping into the cannabis industry you should contact a reputable cannabis real estate company like Michigan Cannabis Properties to help you find a property that best fits your budget and goals.

michigan cannabis real estate business growing
CategoriesBUY/LEASE INVEST/FINANCE

How michigan cannabis real estate business growing?

The accession of reason can be an overwhelming task in starting a cannabis-related business. One of the biggest problems that a lot of entrepreneurs in the cannabis real estate business face is the options for finance for their entities. This is because; credit unions and federally chartered financial institutions cannot provide medical marijuana real estate loans, since marijuana is still not federally legal. As a result of this, there is always the requirement for private financing options.

Michigan cannabis real estate loans offer hopeful medical marijuana business owners easy and quick access to private financing. With these private financiers, cannabis business owners can find investors who may offer cannabis financing for kitchens, marijuana warehouses and store-front properties. The private real estate money lenders will offer the capitals required for marijuana business owners to refinance or acquire a property. The lenders at the private financing company can also provide cannabis entrepreneurs who maintain cannabis business tenants with capital for refinancing or purchasing. With cannabis loan lenders, marijuana entrepreneurs may also cash-out for business capital as well as tenant improvements.

How does cannabis funding work?

As an alternative for cannabis business owners to acquire their own real estate, they may be able to find investors to be their landlords. Private financing companies for medical marijuana business will also have investors who look to acquire buildings for growing cannabis. There may also be investors who can help in finance upgrades and improvements as per their tenants’ requests. Apart from these, investors can offer long-term leasing and negotiation options for purchasing properties in the long run.

Cannabis investment companies will match private loans for property used by marijuana related business that is appropriately licensed according to the state laws. Some of the basic guidelines for medical cannabis business loans can include:

  • The property should be suitable for qualifying for a cannabis business loan
  • The property should be in the state where cannabis business is legal
  • The loan amount may vary with different lenders

With limited financing options and a plethora of cannabis business being launched every day, business owners find it difficult to get the capital for their cannabis business. Finding funding for business has been easy. Though small businesses can get loans easily, interests and loan payments can be unbearable for startup businesses. Now, if getting financing for regular businesses if difficult, finding money for cannabis business is more difficult. Inspire of the countless cannabis business funding companies on the market, getting the credit has been a very difficult thing for cannabis entrepreneurs.

Considering the fact that traditional funding institutions and banks don’t get provide loans to cannabis business owners, most marijuana entrepreneurs tend to rely on friends and family for real estate and/or seed capital. However, not everyone around us will be willing to take the risk of their money for this business.

This is when people look for alternative funding options for their cannabis business. Some of the most common cannabis business capital sources can include:

  • Hedge funds
  • Family offices
  • Athletes, celebrities and musicians
  • Angel investors
  • Business incubators and accelerators

Though the cannabis industry is still in its early stage, the probability of growth in the medical marijuana sector has a lot of private investors. Lenders with the aim of supporting cannabis-related business are for sure on a steady rise. Since there is a huge space for innovation in the cannabis industry, investors are being attracted towards still emerging marijuana business.

What can the cannabis funding use for?

BDS Analytics and Arcview Market Research have predicted that the legal marijuana industry may reach $40 billion in 2021. This means; there will be an increase of 150% from what it was in 2017. This growth will be the result of the legalization of cannabis use spreads throughout the nation.

With such demand and growth in place, cannabis business funding companies lend capital to business owners for

  • Building out existing spaces
  • Constructing new properties
  • Purchasing commercial properties
  • Cashing out and refinancing
  • Purchasing raw land
  • And a lot more

Some people may wonder as to how the cannabis funding industry works. Big banks and financial institutions won’t lend money to legal marijuana business owners. Hence, we understand that financing and banking options are limited. However, there is a requirement and funding could be found.

Numerous reasons could flicker the demand for the flow of capital. Some entrepreneurs would self-fund their business from business profits or personal savings. On the other hand, others will have to look for money elsewhere. Both equity financing and debt exist for this business. It is up to the business owners to find the right investor for their medical marijuana businesses.

Statista states that the cannabis industry has made around $3.2 billion in the USA in 2017. People who are already in the business or getting into it can image what the industry will look like in the future. So, this is the right time for investing in the cannabis business. A great number of people have realized this fact and invested their money and time into the recreational marijuana real estate industry, while a lot of them are reaping the benefits already.

In such a scenario, what holds people back from venturing into the medical marijuana business is the funding. Since the industry is still emerging while being considered risky, cannabis real estate loans for business owners would come with huge interest rates. This is one thing that stands between cannabis growers and their success.

Here is what people should understand about medical marijuana business and how they find cannabis business funding for their investment.

Collateral

It is different for cannabis industry. Generally, borrowers provide collateral to the lenders, so that the lender has it as a security in case the borrower fails to pay the loan amount back. For marijuana businesses, borrowers cannot provide cultivation equipment or up grow as collateral.

At times, this means medical marijuana business owners have to provide something else as a means of collateral. In case, they have nothing to offer, there are various cannabis business financing options which could perfect for getting your medical marijuana business skyrocketing. Based on the above stated aspects, cannabis business owners can look for cannabis-related real estate funding capital.

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