How is cannabis-related business growing?

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Michigan cannabis real estate

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:

  1. The property should be suitable for qualifying for a cannabis business loan
  2. The property should be in the state where cannabis business is legal
  3. 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:

  1. Hedge funds
  2. Family offices
  3. Athletes, celebrities and musicians
  4. Angel investors
  5. 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

  1. Building out existing spaces
  2. Constructing new properties
  3. Purchasing commercial properties
  4. Cashing out and refinancing
  5. Purchasing raw land
  6. 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 on the internet.

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