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How to Get Funding for Your Cannabis Business

cannabis business funding

So many people have dreams of starting their own cannabis business in the bold new industry that strengthens its roots every day. However, one intimidating barrier in the journey is finding financing for your cannabiz. Whether you are looking for cannabis startup funding, loans for your cultivation operation, or funding for a premier firm, our guide can help. There are three main ways to finance your marijuana business: taking out debt, selling equity in your business, or reinvesting profits. The path you choose depends on where you are at with your cannabis company. Before we get into how to get funding, let us take a brief overview of financing your legal cannabis company  

cannabis business financing

Financing Your Cannabis Business 

Business loans for cannabis are exceedingly difficult to find, especially if you’re a startup organization. As cannabis remains a Schedule 1 drug on the federal level, banks will not usually handle any cannabis capital. Fortunately, politicians and activists continue to fight for cannabis business financing, slowly making it more accessible. As more states continue to legalize cannabis in some form, the nation inches its way closer to federal legalization. Although you will not be able to find major banks to finance your marijuana business, there are some other solutions. Please take your time in planning every business detail out and doing extensive research on the funding options you are considering before making a decision. 

marijuana business loan

How to Get a Cannabis Business Loan 

First, you have to present your marijuana business model to a lender. Like any other business, you will need to show the lender that you have all the bases covered. Go over all variables of where your business plan can go and how you are prepared to pivot regardless of what challenges you may face. Include a detailed plan on how you will repay the loan. Be prepared to present everything you’ll need for the cannabis business, including rental space, permits, licensing, supplies, employees, processing equipment, and marketing budget. Additionally, prepare to present business assets that can be seized if you cannot make monthly payments. Check out this loan proposal preparation guide for further details. 

There are a few ways to improve your chances of getting funding for your marijuana business: 

Create the Best Cannabis Business Plan Possible 

Round up financial statements for the past few years, which include checking, savings, and mortgage accounts. As mentioned previously, provide proof of concept and detailed information on how your legal cannabis business will earn money to pay the loan back in a timely manner. Be as thorough as possible. 

Bump Up Your Credit Score 

Start with the basics: pay off any loans or credit cards with past-due penalties or outstanding balances. You can also set a schedule to pay your bills on time, use a secure credit card, or become an authorized user. Check out more ways to build your credit score here 

Save for a Down Payment 

If you’re looking to open a cannabis dispensary or any cannabiz, you’ll want to save as much money as you can for your down payment. Not only will this show that you’re financially capable but also that you believe in your business plan. Plan a savings budget with apps like Mint, PocketGuard, or You Need a Budget 

Partner with Someone Who Will Co-Sign 

If you have a co-signer with a good credit score, you’ll definitely increase your chances of getting a loan. Each lender will have their own requirement, but typically co-signers with a credit score of 670 or better will be solid. However, make sure your co-signer is someone you trust and can collaborate with.  

cannabis industry business loan

Best Cannabis Industry Business Loans 

Finding funding for your marijuana business remains an arduous task. However, there are more lenders that are discovering ways to work with your cannabis dispensary or cannabiz. There are plenty of restrictions and regulations in place, so be extra cautious when considering financing solutions. Make sure you read lender reviews, ask thorough questions, and turn away any lenders with red flags. Here are a few funding options for you to consider for your cannabusiness.  

Dynamic Alternative Finance 

Focused on accommodating legal cannabis businesses, Dynamic Alternative Finance offers working capital loans, real estate loans, bridge loans, and equipment leases. Their application process is familiar: initial phone call, submit your documents, talk to potential lenders, submit any additional documents, and receive your funds.  

Check out Dynamic Alternative Finance

United Capital Source 

United Capital Source provides a wide variety of financing to high-risk sectors, including the cannabis industry. They require minimal documentation, and you may even qualify for a loan despite having poor credit. Their APR starts from 5%, a minimum credit score is 550, and their loan term ranges from 36 to 120 months (about 10 years).  

Check out United Capital Source

Diamond Business Loans 

If you have solid credit, this California-based lender is worth a shot. They are focused on working with businesses that struggle to find funding. Additionally, they have a special program for cannabis businesses. With rates starting at 5.9%, they are competitive when compared to other business loans. You will need a minimum credit score of 680. Their loan amount ranges from $25,000 to $150,000.  

Check out Diamond Business Loans


With GoKapital, you can get cannabis business loans through merchant cash advances. This company provides you with an advanced lump sum, and you repay it through a percentage of your daily credit card and debit sales, which includes a fee. The cash advance ranges anywhere from $50,000 to $5 million. Their minimum requirements include a credit score of 500 or higher, annual sales of over $150,000, and at least four months in business. 

Check out GoKapital 

marijuana business funding alternatives

Alternative Marijuana Business Funding  

If you are not having any luck finding a lender for your legal cannabis company, there are some other options you can try. Check out some of these cannabis startup funding alternatives: 

Asks Friends and Family to Invest  

It may be easier to find friends and family members who believe in your cannabis business plan than professional lenders. Most companies’ first equity investors are comprised of friends and family. This is a great option if you are in the early stage of your cannabiz. However, make sure they are aware of the risks of investing in your cannabis dispensary or other marijuana organization.   

Crowdfunding Platforms 

Crowdfunding platforms from Indiegogo to Kickstarter are a viable option for your marijuana business. Present your business plan on your page and find an angle that will inspire people to fund it. Sell it to your audience through captivating copy and visuals and build a narrative people will be willing to support. There are also cannabis-specific crowdfunding platforms, such as CannaFundr and Fundanna. However, Indiegogo and Kickstarter are the most popular overall. 

Tuatara Capital, L.P. 

Tuatara Capital is focused on investing in marijuana plants. One of their biggest sectors for investments is cultivation. However, they also invest in cannabis business funding sectors like technology, retail, research, testing, and processing. If you are looking to start a cannabis company in retail or cultivation, Tuatara Capital might work for you.  

Check out Tuatara Capital, L.P.

Finding lenders for your cannabis dispensary or other cannabiz is a complex task. Do your homework when searching for lenders or alternate funding solutions. Luckily, as the cannabis stigma fades, loans will be easier to obtain. We wish you all the best of luck in launching your marijuana business!   

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