Lender gives cannabis operators the money they need to get started
Getting into the cannabis business takes money…and some of the go-to funding sources for small businesses aren’t accessible to those getting into cannabis.
Andrew Kaye, executive at lender Sweet Leaf Madison, explains.
“Conventional lenders can’t lend to industry. You can’t go and get a small business loan from the Small Business Administration,” he said. “Why? Because anything with a federal charter is prohibited from funding cannabis.
Sweet Leaf Madison lends to those looking to get into cannabis. Kaye said it can take between half a million and a million dollars to set up a reasonably sized retail operation.
“Small and medium-sized businesses need capital to get in there, but usually don’t have the security to secure the loans, so you have to be more creative,” he said.
Sweet Leaf will lend the hundreds of thousands of dollars for the equipment needed to get started. Kaye says this business could eventually resemble the beer industry – with domestic, craft and micro cannabis growers.
Sweet started in Denver but has his eye on New Jersey, where 34 more licenses were awarded in April.
“These next 34 licenses will likely take between eight months and a year before we see product, and we will fund those entities,” Kaye said.
Kaye says that anywhere from a few hundred thousand to a few million dollars worth of equipment is needed for a business processing cannabis.