International Cannabis Markets to Watch in 2023

Only a handful of countries (including Canada, Uruguay, and Mexico) have legalized cannabis possession. Even among countries that allow cannabis possession and cultivation, many do not have legal markets where adults can purchase products. For instance, you can get a permit to cultivate marijuana in Mexico, but you cannot sell what you grow.

Despite some reluctance, new cannabis markets are emerging throughout the United States and around the world. Some researchers believe the global market will reach $197.75 billion by 2028. Currently, the global cannabis market has a value of about $28 billion. With rapid growth on the horizon, it pays to know where investors and entrepreneurs should concentrate their efforts.

Germany Takes Cautious Steps Toward Legalization

In 2021, all three of Germany’s ruling parties agreed they wanted to legalize recreational cannabis soon. Some confidently stated they could reach that goal by 2023. More recently, the German government has sounded less optimistic about that goal. It still wants to pass laws that legalize cannabis for adults, but it needs to consider how doing so might infringe on other laws within the European Union.

A strategy has emerged that would make cannabis sales and consumption legal in private, preventing cafes, restaurants, and similar businesses from reaping financial benefits. Still, it’s a short-term approach that might help Germany make cannabis more accessible without attracting anger from other members of the EU.

A legal market might not come to Germany by the end of 2023, but the government is focused on doing what it can as soon as possible. That makes Germany an attractive option for anyone evaluating emerging cannabis markets.

Mexico Has a Complicated Landscape for Legalization

Cannabis became legal by default when Mexico’s Supreme Court ruled that prohibition violates the country’s constitution. Currently, individuals can get licenses to cultivate cannabis. They can also possess cannabis for personal use. They cannot, however, sell it. That essentially means that Mexico doesn’t have a legal market where anyone interested in cannabis products can legally buy products.

What’s preventing the country from moving forward? So far, the federal government just hasn’t developed policies that would regulate a legalized cannabis industry. The result of this regulatory failure isn’t surprising: consumers buy cannabis products from black market dealers who operate without any oversight.

Mexico’s federal government has shown some willingness to work toward a regulated industry that gives consumers accurate information about the items they buy. A law hasn’t been passed yet, but you can expect several bills to emerge over the next few years.

Thailand Shifts Its Position Dramatically

Not long ago, Thailand had some of the world’s most oppressive cannabis laws. At the same time, anyone walking through a Bangkok entertainment corridor would smell marijuana smoke. The laws were strict but enforced randomly. It was a confusing legal landscape for residents and tourists.

Now, those same corridors bustle with legal cannabis vendors selling edibles, pre-rolled joints, and flowers by weight.

This is potentially just the beginning of Thailand’s role in the legal cannabis industry. A large percentage of the country’s residents rely on making money from agriculture. The climate also makes Thailand an excellent place to grow cannabis outdoors.

Thailand could easily produce more cannabis than the country can use, creating the potential for it to emerge as a major exporter. Right now, no country allows international cannabis sales. If that changes, Thailand is positioned to become a major player in the world market.

Near the beginning of 2021, Malta passed laws that decriminalized cannabis possession and expunged the records of citizens with possession charges. By the end of the year, Malta had taken a much bolder move by allowing adults medicinal and recreational cannabis sales. The only catch is that the law only lets non-profit clubs sell cannabis to consumers.

Will the government maintain this restriction? It seems to have worked well, but the industry is just starting. Over time, the government could find that it makes sense to privatize the industry.

Perhaps even more importantly, Malta is the first European country to legalize cannabis fully. This will inevitably put pressure on other countries to follow its lead.

Italy Now Allows Medicinal Cannabis Sales

Italy has decriminalized cannabis possession for personal use. It also has a regulated industry for medicinal marijuana. However, it has not passed laws that would make recreational sales legal.

Not surprisingly, some members of the Italian government want to create a legal industry for recreational cannabis. Many of them recognize that Italians already consume cannabis illegally—often without legal consequences. Why not collect taxes that would help fund federal initiatives?

Look for more activists and politicians to push for these changes in the near future, especially as the public gets used to medical cannabis.

It will take some time for these countries—and the U.S. states that recently legalized cannabis—to create the infrastructures and policies needed to keep consumers safe, fund government projects, and ensure companies remain profitable. Keep your eyes on these locations. Each development takes them closer to legalization and opportunities to generate revenue from legal marijuana.

October 18, 2022Comments Off
How Much Cultivation Land Do You Need?

You know that you want to start a cannabis cultivation business that earns excellent profits by selling high-quality flowers and plant material to clients. Wanting to get your business started (or to expand your existing business) is a great first step. Before you can create a successful business, though, you need to answer several questions. “How much cannabis cultivation land do I need?” sits right at the top of the list.

To answer this question accurately, you will need to think more carefully about what you want your business to accomplish and what goals you can realistically reach. It isn’t an easy question to answer, but you can decide approximately how much cultivation land for sale to look for when you break the big question into several smaller parts.

Do You Want to Grow Hemp or Cannabis Flowers?

Hemp and cannabis are different varieties of the same plant, Cannabis sativa. Hemp grows very quickly and has a wide range of uses. Cannabis has the same uses. The biggest difference between the plants — especially when it comes to the law — is how much THC they contain. Hemp cannot have more than 0.2% THC.

Why does this matter? Because it influences what you can grow in your state.

The U.S. federal government legalized hemp through the 2018 Farm Bill. Cannabis, however, remains illegal at the federal level. A growing number of states allow cannabis cultivation for medicinal and recreational use, which is great news for personal liberty and entrepreneurs.

Whether you want to grow hemp or cannabis, you will need to get a permit from your state. That’s where the bad news comes in. Overall, there are fewer cannabis cultivation permits than hemp cultivation permits. That may change in the future. Right now, though, you need to know your state’s laws, whether you can get permission to grow hemp or cannabis, and where you can grow the crops.

You can make more money growing luxurious cannabis flowers. If you don’t live in a state with legal cannabis, though, you might only have a chance to explore hemp land for sale. You still have great opportunities with hemp farmland for sale. You can’t expect to make as much money from it as you would cannabis, however.

How Much Cannabis Do You Want to Grow?

Let’s assume you live in or near a state that lets you cultivate cannabis. Now, you need to know how much cannabis you want to grow.

Like most business owners, you probably answer that question with a dollar sign in front of it. The wholesale price of outdoor-grown cannabis in the U.S. was about $950 per pound in 2020. The wholesale price will change from year to year depending on factors like weather and demand. Keep in mind there was exceptional demand for cannabis products in 2020 as people struggled with stress from the pandemic. To stay on the safe side, let’s say that a pound of dry cannabis flowers wholesales at $900.

If you want revenue of half a million per year, you need to sell about 556 pounds of cannabis flower. Interestingly, that’s the weight of cannabis flowers many farmers say they get from one acre of land. Of course, how much flower you get depends on numerous variables, including:

  • How much space you give your plants.
  • Whether your plants get the sunlight, water, and nutrients needed to grow well.
  • Properties of the strain(s) you grow.

Again, to keep the numbers on the safe side, let’s say you can expect to get 500 pounds of cannabis flower per acre per year. At $900 per pound, you still make $450,000 in revenue.

At this point, one acre might sound like more than enough land for your cannabis cultivation. But don’t forget that $450,000 in revenue isn’t anywhere close to $450,000 in profit. To reach that amount, you will need considerably more land.

Expenses That Affect Your Cannabis Cultivation Profits

Consider how many things you will need to pay for before you can generate a profit from cannabis land. Some of your most significant expenses include:

  • The price of purchasing the land.
  • Taxes and permit fees (they vary wildly depending on your state).
  • Buying and maintaining farming equipment.
  • Young plants that you will grow into mature, flowering plants.
  • Shipping (it costs money to get flowers from your farm to a warehouse or store).
  • Employees (a master grower can earn more than $100,000 per year).
  • Insurance (you’ll need general liability insurance, crop insurance, workers’ compensation insurance, product liability insurance, etc.).

You also need to consider whether the cannabis cultivation land has been developed. Raw land may not give you access to any utilities. Perhaps you have a pond on the property that can help provide water, but you will not have electricity or sewage. Installing these systems will cost a lot of money before you can start growing your crops.

Does the land have any buildings on it? Your farmland must do more than provide space to grow cannabis. You will need a place to store your equipment, dry your flowers, and process other plant materials. You will need bathroom facilities on the property. You might want to build a small house where you can conduct business and spend the night when necessary (it may be a long drive back to town).

When you consider all the costs of starting a cannabis cultivation farm, you quickly see that you will not make half a million dollars per acre. The actual amount of profit you can earn depends on how much you spend throughout the year. In many states, the taxes alone will make your jaw drop.

Yes, all of this looks very expensive. That doesn’t mean you should give up on your dream of becoming a cannabis cultivator. Plenty of people have gotten rich by growing legal cannabis outdoors. To get there, you need to find the right plot of land.

Features to Look for When You Buy Cannabis Cultivation Land for Sale

Clearly, you have a lot to think about before you buy cannabis land for sale. Some things are more important than others, though. You can have a barn built pretty easily. You cannot change the amount of sunshine an area gets.

Look for the following features when you compare cannabis cultivation land for sale.

Plenty of Direct Sunlight

A lot of people believe cannabis needs high temperatures to grow well. That isn’t true. Consider, for instance, that some of the best marijuana comes from Northern California, which has a mild climate and high elevation.

Cannabis does, however, need an abundance of sunlight to reach its maximum size. When researching cannabis cultivation land, look for options that:

  • Have long days that will give your plants plenty of direct sunlight.
  • Don’t have objects, such as a forest or mountain, that will block sunlight, effectively cutting your day short.

Indoor cultivators have complete control over how much light their plants get. By growing cannabis outside, you lose that level of control. You do, however, have the ability to choose a location that will give your plants the sunlight they need to grow.

Soil That Drains Easily

Standing water causes significant problems for most plants. When you have too much water, it’s only a matter of time before molds and fungi start to grow. It doesn’t take long before they can ruin your crop.

Well-drained soil will help ensure that your plants get plenty of water without suffering from conditions like “root rot.” Yes, if your plant’s roots stay too wet for too long, they will start to rot in the ground. As the roots degrade, the rest of the plant dies.

You can perform a quick soil drainage test by digging a hole about one foot deep and pouring a gallon of water into the space. Ideally, the water will stay in the hole for a few minutes before draining beneath the surface.

Don’t make a financial commitment to the land until you have a professional analyze the soil. Environmental tests can check the soil for good draining, a pH level that cannabis enjoys, macronutrients cannabis needs to grow, and micronutrients that can enhance growth.

Browse environmental services on 420 Property to get land analyzed before you buy!

Access to a Water Source

During the best years, your crops will get watered by frequent rainfall that keeps the soil moist but never threatens to drown the plants. Unfortunately, you can’t rely on the weather to work in your favor. You will almost certainly face a drought at some point in your cultivation career.

You don’t need to worry about rainfall nearly as much when you have access to a water source on your land. If the farm is located near a town, you might find that you can tap into the municipal water supply. From there, you can irrigate your crops to keep them happy and healthy.

Farmland located far from other companies and residents, however, may not have accessible waterlines. In this case, you will probably need a large pond. When your plants don’t get enough rain, you can pump water from the pond and irrigate your crops.

The problem with a pond, though, is that you can lose the water during a severe drought. With enough heat, the water will evaporate, leaving behind a puddle of mud. This probably won’t happen, but it’s a possibility.

When comparing farmland, look for options that can connect to municipal waterlines. If that’s not an option for you, try to find a property that already has a large pond. Otherwise, you will need to hire someone to dig a pond for you. It’s not incredibly expensive, but it is one more thing that you have to pay for.

Access to Power (Electricity)

This is one of the biggest concerns for outdoor cannabis cultivators. Some farmland in the U.S. does not have access to the power grid, which makes it difficult for you to access the electricity you need to power everything from water pumps to security lights.

Secondarily, you want to make sure that you can rely on the local power grid. Can the line running to your property power all of your electrical equipment? Will you need to ration power to prevent a short? These aren’t surmountable problems, but they’re far from ideal.

You can get a generator, but most generators are built for short-term use. They burn fuel quickly and emit a lot of carbon dioxide. You don’t want to rely on them as your sole source of energy.

Solar panels offer a better option for off-grid energy production. Solar technology has improved quite a bit over the last decade. You can probably get more power than you think from a few panels. Depending on your property, you might choose to install the panels on a building or erect them in a field. Either way can work well as long as you don’t need that small patch of ground for cultivation.

Solar panels and installation don’t always cost a lot of money, and they can make an excellent alternative to power grids.

Browse solar equipment listings on 420 Property to find options that match your land’s energy needs!

Low Visibility

Let’s think about location. On the one hand, you want your cannabis cultivation land fairly close to a town or city where you can buy supplies. Some of the best cultivation land sits right outside major cities, making it easy for you to transport dried flowers and other products to distributors.

On the other hand, you don’t want everyone who passes by the property to see that you have several acres of cannabis. Most people will leave your farm alone. Someone, however, will eventually get the idea that they can sneak onto your land, grab a few ounces, and earn money selling your cannabis illegally.

You can construct fences, install security systems, mount motion-sensing lights, and post guard dogs all over the place. All of those things cost money. Also, there is always someone out there desperate or stupid enough to try trespassing on your land.

It’s much easier to choose a location with low visibility. Perhaps you have a nice farmhouse and barn that blocks the view of your crops from the road. Maybe you have to drive down a long path to access your cultivation land. You could potentially grow several types of crops in your fields, carefully placing the cannabis out of sight.

Obviously, you’re running a legal cultivation business. You should still keep stealth in mind. While you want to comply with the law, others will want to steal from you and sell your product on the black market. That’s not why you get into the legal cannabis cultivation industry.

Proximity to Major Roads

While you don’t want high visibility, you do want easy access to major roadways. Depending on your area’s laws, you might ship cannabis all over your state. A farm located near a highway or interstate will reduce the time and money it takes to move your product to warehouses and retailers.

Proximity to a major road will also make it easier for you to bring in the equipment and supplies you need to manage a successful company. A solar power installation company might charge a nominal fee for bringing equipment to a farm that sits right outside the city. If you’re 100 miles away off a dirt road, though, they might want to raise their price.

Compliance With State and Local Rules

As always, you must comply with state and local rules when cultivating cannabis. Your state might have a law about keeping cannabis grow operations away from school zones. Some communities have laws that forbid anyone from growing cannabis within their borders. The state government might approve of your business, but that doesn’t mean the local municipality does.

Cover all your bases by consulting with cannabis business and real estate lawyers. They can review your cultivation plans, compare them to state laws and local ordinances, and give you assurance that you comply.

Search cannabis business and real estate lawyers on 420 Property to make sure you buy property where you can operate your business legally.

Find Your Cannabis Cultivation Land on 420 Property

The amount of cannabis cultivation land you need depends on a lot of variables. Size isn’t the only thing that matters. You also need an environment that nourishes your plants.

Are you ready to start comparing cannabis cultivation land that can lead to business success?

Find your next property today!

October 14, 2022Comments Off
Common Types of Loans for Hemp & Cannabis Businesses

Unlike most industries, companies that work with hemp and cannabis find it challenging to secure loans through banks and credit unions. Unfortunately, federal law makes it nearly impossible for traditional banking institutions to work with the hemp and cannabis industries. Even when a presidential administration says that its Department of Justice will not pursue cases in states with legal cannabis, banks know that the next administration could take the opposite approach.

Luckily, private lenders have stepped in to help cannabis and hemp businesses meet their funding goals. At Lender420, we help you find a lender that can meet your needs. It helps, however, to know what type of loan will benefit your company most.

The following list will introduce you to the common types of loans for hemp and cannabis businesses.

Real Estate Loans for 420 Properties

The best cannabis real estate for sale can cost a lot of money to buy. The downside is that you need to accumulate a sizable amount of money before you can buy a storefront, farm, greenhouse, or warehouse space. In return, you get several benefits, such as:

  • Access to a large community of cannabis consumers willing to pay for quality products.
  • Visible storefronts that commuters see throughout the day.
  • Locations with heavy foot traffic.
  • Cannabis-friendly neighborhoods that charge reasonable taxes and let you meet consumer demands.

Unless you have a couple of million dollars saved, you will have a very hard time purchasing 420 properties without relying on a loan. Commercial real estate loans can fall anywhere from $500,000 to $25 million. A larger company with excellent credit might even qualify for higher sums.

Ideally, you can make a down payment that covers at least 30 percent of the commercial real estate’s appraised value. Qualified borrowers, however, can possibly get loans with small down payments.

Loan terms typically last from six months to 10 years. You can expect to pay 7 to 15 percent interest.

You can get the lowest interest rates by developing an excellent business plan, maintaining a high credit rating, and making a larger down payment.

You have a lot of options, and even a couple of percentage points can make a huge difference in the amount you repay. Get the best deal by starting your search with Lender420.

Equipment Loans

All types of cannabis businesses need equipment loans. If you own a dispensary or storefront, you can use an equipment loan to purchase items like security systems, point-of-sale systems, and even attractive shelving that will make products more appealing to customers.

In a greenhouse, you can use an equipment loan to help you buy irrigation systems, solar power panels, and machinery that helps you move products efficiently.

Grow houses based inside warehouses have significant equipment needs. Lighting and irrigation systems can cost thousands upon thousands of dollars. There are cheaper options, but they rarely work as well as highly calibrated systems that help cannabis plants reach their maximum potential. When you want large flowers with high THC and CBD percentages, it makes sense to buy the right equipment. You could save money in the long run.

In some cases, you can lease equipment. Owning is usually the best option, though. Equipment loans from Lender420 make it possible for you to get the items you need to streamline your business and cultivation processes.

Loan terms usually fall between one and seven years. Rates tend to start around 7 percent. With lease-to-own, you can finance up to 100 percent of the equipment’s cost.

Hemp and Cannabis Business Loans

Hemp and cannabis business loans give you more control over how you spend the money you borrow. Lenders will want to know how you plan to spend the money, but you are not restricted to specific items like equipment or real estate.

Lines of Credit

Lines of credit are extremely flexible. Your credit cards are lines of credit, so you can expect your cannabis business line of credit to work much the same.

There are some specific cases when you have restrictions on how you use your credit. For example, you might have a line of credit with a cannabis wholesaler. In that case, you can only use your credit to purchase products from that company.

When you have a line of credit from a private lender, though, you open your business to more growth opportunities. For example, you know that you can purchase the inventory you need without running out of money to meet payroll. When you find yourself in a tight spot, you can tap into the line of credit for temporary help.

Working Capital Loans

Working capital loans play a similar role as lines of credit. They are not long-term loans that you use to grow your business. Instead, they are small, short-term loans that fill in the financial gaps that businesses often experience.

The next time you find yourself wondering how you can pay all of your expenses, you should look into a working capital loan. Lender420 can put you in contact with a reliable lender with reasonable rates.

Real Estate Sale-Leaseback Funding

Real estate sale-leaseback funding is a creative way for you to maintain control of your property while using it to borrow the money you need to operate a business.

The arrangements typically involve finding a third-party lender willing to let you borrow an amount of money approximately equal to the value of the real estate. You retain ownership of the property as long as you continue repaying the lender.

To an outside observer, it looks like you’re leasing the property. In reality, you own the property but you pay someone else because they let you use the real estate as collateral.

Explore Your Cannabis Funding Options With Lender420!

You have plenty of funding options to start or grow your cannabis and hemp industry business. Start by filling out a Lender420 application. We’ll contact you to discuss opportunities and help you choose a great solution.

October 14, 2022Comments Off
How to Submit a Successful Cannabis Business Loan Application

Starting a small business might not sound like it costs a lot of money. When you take a closer look, though, you often find that even the smallest hemp and cannabis startups need at least half a million dollars before they can even begin operations. Financing from Lender420 makes it possible for you to access the money you need to pay for essentials.

Unfortunately, not everyone can qualify for a cannabis business loan. Even fewer people get business loans with low interest rates. Typically, businesses can expect to pay anywhere from 7 to 15 percent interest. Qualifying for a lower rate will make it much easier for you to repay your loan while generating profits.

The following guide will help you learn how to submit a successful cannabis business loan application. Follow these steps to improve your chances of getting a low-interest loan that helps your new or growing business thrive.

Maintain an Excellent Credit Rating

Although private lenders aren’t forced to follow as many rules as banks and credit unions, they do take their decisions seriously. They must, after all, protect their investments.

Having an excellent credit rating, typically defined as a number between 800 and 850, will make your cannabis business loan application more appealing to lenders. If you have a credit score over 800, you have a good chance of securing a low-interest loan that will help fund your business.

If you do not have an excellent score, you can start taking steps to improve your rating. Most people and businesses find that they can raise their scores quickly by:

  • Lowering the amount of debt that they carry (especially high-interest credit card debt)
  • Contact the major credit bureaus to request a copy of your credit history.
  • Review your credit history to find any inaccuracies that could pull down your credit score.
  • Make all payments on time (if you must delay payments, always pay them within 29 days of the deadline).

Depending on your current rating, you could improve your score within a few months. The effort and time you invest will make it easier for your cannabis business lender to give you an affordable loan that meets your needs.

Do you need additional help making your loan application appealing to lenders? Contact Lender420 to talk to a consultant. Your consultant might have advice that improves your qualifications quickly so you can get a loan and start your cannabis business.

Save Money for a Down Payment

A down payment can help your loan application stand out from others. Having money for a down payment is especially helpful when you want to purchase real estate, vehicles, and equipment.

How much money should you put down for your cannabis loan? Ideally, you can commit to 30 percent of the overall cost. That’s not a small amount of money when you’re starting or growing a cannabis business. Buying real estate for hemp or cannabis cultivation can easily cost $1 million. That means saving $300,000.

Accumulating the money you need for a down payment probably sounds challenging. You get several benefits from a sizable down payment though. When you commit your own money, the lender will know that you take the business opportunity seriously. That makes it more likely that you will get a favorable interest rate. Even one point lower could save you tens of thousands of dollars in interest payments.

For New Businesses: Write an Effective Business Plan

Lenders want to know how you plan to use the money they give you. They also want to know that you have a good idea for turning your loan into a profitable business.

Writing an effective business plan can have a significant impact on a lender’s decision to accept or decline your application for a cannabis business loan.

Your business plan should include:

  • A stand-alone executive summary that explains uses four to five pages to explain how you plan to grow a successful cannabis business.
  • A management team section that describes the skills and experience of the people on your management team.
  • A value proposition that explains how your company will fill an unmet market need.
  • A section that describes opportunities in the market, such as targeting a specific audience or releasing a product that will appeal to new consumers. This section should include data that backs up your claims.
  • A description of your operating plan that tells lenders how you will build a profitable business structure that streamlines processes and maximizes efficiencies.

If you already have a location or license for your cannabis business, include that in your business plan. It demonstrates that you have already been through much of the industry’s bureaucracy. The location might also play a role in your business’s success.

For Existing Businesses: Write an Expansion Plan

If you want a cannabis business loan to expand an existing brand, you need to provide financials from the last several years. Essentially, you want to use accurate data to show the lenders that your business can turn a loan into profits.

How do you plan to use the money you borrow? What impact will the changes have on revenues and brand recognition?

Anticipate questions lenders might ask. It’s always better to put lenders at ease early in the process. A favorable impression puts you ahead of other applicants who have not taken these extra steps.

Review Your Opportunities for the Best Cannabis Business Loan

Whether you want to buy a greenhouse, open a new storefront, or purchase extraction equipment to start making new cannabis products, Lender420 can help you reach your goal.

Get started today by filling out the Lender420 application to let our consultants know about your business plans. We’ll do our best to pair you with a loan that helps your business succeed while keeping interest and fees as low as possible.

October 14, 2022Comments Off
The Pros And Cons Of Real Estate Loans For The Cannabis Industry

usiness can cost quite a bit of money. Unless you already have several million dollars in cash, you will probably need a real estate loan for your cannabis business. Learn about the pros and cons of cannabis property loans so you can make informed decisions.

Con: You Cannot Rely on Banks and Other Traditional Lenders

Banks and credit unions must follow federal laws, making it dangerous for them to work with businesses in the cannabis industry. Even when you operate in a state with legal cannabis, few banks will want to loan your business money.

The apprehension of traditional lenders will probably remain as long as the federal government lists cannabis as a Schedule I drug. Banks did not start lending to the cannabis industry during the Obama Administration even though the president said that the Department of Justice would not focus on legal businesses. That was a smart decision for the banks. As soon as Jeff Sessions became the Attorney General, that rule changed.

Unfortunately, that means you cannot rely on a bank or credit union to give your cannabis business real estate loans. Until the law changes, they will not take the risk.

Pro: Private Real Estate Loans Can Help Fund Cannabis Property Purchases

Private real estate lenders don’t need to worry as much about following federal laws. Since they do not act as banks, they have fewer restrictions.

Plenty of reputable lenders have filled the gap left by banks. Now, you can apply for and receive money that makes it possible for your cannabis business to grow. It’s no different than any other type of business borrowing from a private lender.

Con: Higher Interest Rates, so Compare Offers

The amount you pay for 420 real estate can vary significantly depending on the type of property you want to purchase and where the property is located. A fully-equipped recreational retail store for sale in Michigan might cost about $2 million, while a medical marijuana dispensary in Oklahoma might cost half a million.

Regardless, most businesses do not have immediate access to that much money. A cannabis real estate loan makes it possible for you to purchase property. You will, however, have to pay interest on the loan, which increases the overall cost of the property.

Slight differences in interest rates and fees can significantly affect how much money you spend repaying your real estate loan.

Let’s say you borrow $1 million with a loan that charges 15 percent over the next five years. You can expect to pay your lender about $23,789 per month. By the time you repay the enter real estate loan, you will have spent about $1.43 million. That’s $430,000 in interest.

Even a 1% change makes a big difference in the amount of interest you repay. Consider what happens when you borrow $1 million and repay the money over five years with a 14 percent interest rate. Your monthly payment falls to about $23,268. You save about $520 per month just by lowering your interest rate by one percent. When you finish repaying the loan, you will have spent about $1.396 million. With just one percentage point, you’ve lowered your overall repayment by more than $30,0000.

Take time to compare all of your offers so you can get a real estate loan that helps you purchase property without spending more money than you can afford.

Pro: You Can Get Competitive Loan Offers From Private Lenders

The good news is that most private real estate lenders know they face a lot of competition from each other. Assuming that you have an excellent credit score and can commit to a 30 percent down payment on the property, you will attract attention from several lenders.

At best, you might qualify for a loan that charges 7 percent. That would make it much easier for you to start a successful business that generates enough revenue for you to repay your loan and still keep profits that help your brand grow.

If you don’t have an excellent credit rating or a sizable down payment, talk to private lenders to see how you can make your application more appealing. You might learn that waiting a few months will give you time to improve your credit rating or save more money for a down payment.

Con: You Will Likely Need a Substantial Down Payment for Your Real Estate Loan

Practically all lenders will require a down payment before they let you borrow money. The down payment helps ensure that you take the arrangement seriously. When you invest $30,000 in a $1 million property, the lender sees that you’re willing to accept some risk and lower their risk.

Keep in mind that lenders will often lower their interest rates when you contribute more to the down payment. With $30,000 on a $1 million property, the lender might charge 13 percent. With $100,000, you could find yourself paying 10 percent or less, depending on factors such as your credit history and the property’s value.

Pro: Many Private Lenders Will Work With You to Meet Your Needs and Limitations

Are you slightly shy of meeting your lender’s requirements? That doesn’t mean you shouldn’t apply for a loan. Some private lenders are willing to overlook minor imperfections and keep the big picture in mind. Your credit score, for instance, might not reflect your actual risk or trustworthiness.

When in doubt, reach out to private lenders to talk about ways you can qualify for cannabis real estate loans. They might give you advice that makes the process easier and faster.

Start Your Cannabis Business With Help From Lender420!

No matter what type of cannabis business you want to start, you will save money in the long run by purchasing real estate. Apply for a real estate loan through Lender420 to see whether you qualify for the amount of money you need.

October 14, 2022Comments Off
How to Apply for Cannabis & Hemp Industry Funding

ways, applying for cannabis and hemp industry funding doesn’t differ much from the process that businesses in other industries follow. Unfortunately, most banks refuse to work with companies in the cannabis and hemp industry because they worry about breaking federal laws.

Many banks won’t even let cannabis and hemp businesses use services for checking and savings accounts. Even as states encourage banks and other financial institutions to work with companies in the cannabis and hemp sectors, banks know they must follow federal laws. If the federal government decided to crack down on banks working with “criminal” organizations, it could target any bank that does business with cannabis and hemp companies.

Until laws change at the federal level, this situation will not likely improve in any meaningful way.

Private Funding Fills a Critical Role in the Cannabis and Hemp Industry

Private funders and investors might feel some pressure from the federal government. However, the growing opportunities to generate profits from cannabis and hemp make it nearly impossible for private funding to avoid the industry’s growth.

When investors and lenders look at the industry, they see opportunity. In 2019, the legal cannabis market generated about $13.6 billion in sales. As more states adopt medical and recreational cannabis laws, the legal market should keep going. Estimates show that the industry could reach $85 billion in sales by 2030.

Increased adoption of CBD, delta-8 THC, and other cannabinoids will only add to the industry’s growth with increased sales and high profits.

Cannabis and Hemp Funders Take Business Seriously

No one running a cannabis and hemp business or wanting to enter the industry should believe that cannabis and hemp funders take their jobs less seriously than funders in other industries.

The potential negatives of working in a semi-legal industry often mean that funders must scrutinize these opportunities in great detail.

Anyone interested in applying for cannabis and hemp industry funding will need to take every step of the process seriously. One mistake could mean losing access to funds.

Understand Personal and Business Credit History

Entrepreneurs who want to expand their reach in the cannabis and hemp business will probably need to prove they know how to handle their personal and business finances. Before pursuing funding, cannabis and hemp business owners should request copies of their credit reports. Everyone needs to take this part seriously because one in five credit reports contains inaccurate information that could damage a business owner’s chance of securing funds.

Disputing errors and getting them removed from credit reports can take months, so it makes sense to start this process long before applying for cannabis and hemp business funds.

Write a Detailed Business Plan

All existing and potential companies need business plans that show how they plan to operate and generate profits. The U.S. Small Business Association (SBA) has an excellent resource that can help entrepreneurs write effective business plans.

While there are different types of business plans, a traditional format should include the following.

Executive Summary

An executive summary briefly describes the business and provides a high-level overview of its plan for growth.

Company Description

A company description offers specific information about how the business will solve consumer problems and how it will create a competitive advantage over similar companies in the area.

Market Analysis

A market analysis describes the industry and target market while providing information about industry trends. It also discusses how successful businesses in the industry operate and how the new business will compete with existing ones.

Organization and Management

The organization and management section describes the business structure and lists who will fill essential roles. An organizational chart can make it easier for readers to understand who manages each area of the business and why that person has the right qualifications for the job.

Product Line

The product line should include all information about products the business expects to sell. If the business has filed intellectual property documents, such as copyrights for cannabis strain names, those documents should have prominent mention here and also appear in the addendum. (More on the addendum below.)

Marketing and Sales

The marketing and sales section describes how the business plans to connect with and retain customers. This section should take a detailed look at marketing plans because the costs will factor into the funding request and financial projection sections.

Funding Request

The funding request details how much money a business will need over the next five years and how it will spend that money. The request should include information about purchasing equipment, paying salaries, and covering bills.

Financial Projection

Financial projections need to convince potential funders to provide money, loans, grants, or other funding options to the business. Existing cannabis and hemp businesses can provide information showing that they already generate profits. New businesses may need to include estimated expenses for the business, any collateral that can offset risk, and a five-year plan for becoming profitable.


An appendix or addendum includes any helpful documents or information, such as credit histories, product pictures, licenses, permits, contracts, and letters of reference.

Improve the Approach With Help From an Organization Like SCORE and SBA

Companies in all industries often experience challenges when seeking funding sources. New and existing businesses can improve their chances of success by using the services of organizations like SCORE.

SCORE provides training and mentorships that can make businesses more successful. Most cities have nearby SCORE locations where entrepreneurs can learn about subjects like:

  • Successfully starting new businesses.
  • Improving business plans so they appeal to potential funders.
  • Finding the right business structure for businesses in the cannabis and hemp industry.
  • Taking smart approaches to marketing new businesses.
  • Understanding the differences between funding options.

SCORE isn’t the only resource available to new businesses. The Small Business Association (SBA) could also provide support for new and growing companies. Considering that the SBA is part of the federal administration, it will not help cannabis and hemp businesses secure funding. SBA offices may, however, work with cannabis and hemp businesses to improve business plans and compare funding options.

Understand Funding Options

Funding options in the cannabis and hemp industry look similar to those available in other industries. 

Real Estate Loans

Cannabis and hemp real estate loans can help pay for storefronts, processing facilities, warehouses, and farmland. 

Business Capital, Credit, Equity, and Loans

  • AR and PO financing for cannabis and hemp businesses.
  • Lines of business credit for covering short-term expenses.
  • Asset-based and collateralized loans that often have lower interest rates than loans unsecured by collateral.
  • Short-term working capital loans.
  • Working capital loans.

Cannabis and Hemp Equipment Loans

Equipment loans handle leasing and financing for items like closed-loop extraction systems used to make concentrates. Many cannabis and hemp businesses find they can expand their product lines by getting equipment loans that help them make items like oils, tinctures, and edibles.

Comparing Cannabis and Hemp Business Funding Options

Interest rates and terms (equaling the length of time borrowers have to repay their loans) significantly affect how much money businesses need to repay.

A $50,000 business loan with a two-year repayment schedule and an 8 percent interest rate will cost the business about $4,272 in interest. The same loan paid over three years will cost the borrower about $6,400 in interest.

Small changes in interest rates will also dramatically influence how much money borrowers repay. A three-year loan with an 8 percent interest rate will cost the borrower about $6,400 in interest. Increasing the interest rate to 10 percent brings the overall interest payments to about $8,080.

Comparing funding options can take a lot of time and effort, but it helps businesses save money.

Secure Cannabis and Hemp Industry Funding From Lender420

Get the best terms and interest rates for cannabis and hemp industry funding by applying through Lender420. Lender420 works with a network of lenders and financiers with experience in the cannabis and hemp industry. When entrepreneurs apply through Lender420, they can connect with the right cannabis financing option for new business or business expansion.

Instead of applying with multiple funders, turn to Lender420 to get competitive terms that help ensure business success.

October 14, 2022Comments Off
Cannabis Use at an All-Time High Among Young Adults

New research recently published in the Monitoring the Future Panel Study Annual Report shows increased cannabis use among young Americans. The demographic includes everyone in the United States, ages 19 to 30. It does not include teenagers under 19.

Monitoring the Future started collecting data about adult substance use in 1988. The new release shows the highest cannabis use on record. The report shows that:

  • 42.6% of young adults used marijuana at least once in 2021.
  • 28.5% of young adults used marijuana at least once within the past 30 days.
  • 10.8% of young adults say that they use marijuana daily (although daily is defined as at least 20 times within the last 30 days).

Outlets report that vaping marijuana declined at the beginning of the pandemic. The activity has now returned to its pre-pandemic level. Approximately 12% of young adults vaped cannabis in 2021.

Alcohol remains the most popular drug used by young adults in the U.S. 81.1% said they had used alcohol at least once within the last year. 66.3% said they had consumed alcohol within the last 30 days.

Where Do Young People Purchase Cannabis Products?

Unfortunately, these numbers likely mean that the U.S. still has a thriving black market that sells cannabis to underage consumers. The legal market has proven its ability to exclusively serve adults 21 and over.

In California, no legal cannabis dispensary served an underage consumer in 2021. Medical and recreational dispensaries have robust systems in place that prevent underage people from entering the premises or purchasing products. For example, most stores have a waiting room where customers can relax while employees verify their IDs. Once verified, the customers can enter the retail room, where a trained representative helps them choose products that match their needs. Customers do not reclaim their IDs until they leave the stores.

These systems ensure that all customers are of legal age. They also help prevent theft and burglary by minimizing the number of people in the retail space.

For comparison, a recent report shows that alcohol companies earned about $17.5 billion from underage drinkers in 2016. Some experts predict that underage consumers can successfully purchase alcohol 30% of the time. Several factors probably affect this, including poor security and lax standards at liquor stores. Cannabis dispensaries, however, have shown that they take the law much more seriously.

If adults under 21 are using cannabis products, they either purchase them from black market dealers or have older friends purchase them legally from a dispensary.

Is It a Problem When Young People Use Cannabis?

Some research shows that using cannabis before the brain is fully developed can lead to cognitive impairments. The same is true of other drugs, including alcohol.

Unfortunately, the human brain doesn’t finish developing until about 25 years old (although the exact age varies from person to person). Therefore, it isn’t ideal for 19-year-old consumers to use cannabis or other mind-altering substances.

The potential risks are reduced as people move closer toward full brain development. This makes it important for all retailers to follow the law and ensure that they only sell products to legal adults.

September 2, 2022Comments Off
Arizona Medical Marijuana Market Struggles To Remain Robust

Arizona took a huge step forward in 2020 when voters decided to legalize recreational cannabis for adults 21 and over. Now, medical and recreational stores operate throughout the state. An odd thing has happened, though: even as recreational cannabis retains its earlier sales, the medical market has slipped.

Medical marijuana has been legal in Arizona since 2010 when voters passed the Arizona Medical Marijuana Act.

Medical Cannabis Sales in Arizona

Arizona’s medical cannabis sector has struggled, especially since the state let retailers start selling recreational cannabis products.

In May of 2022, medical marijuana sales dropped by $45 million. It was only the second time medical sales dropped below $50 million. Even the number of medical marijuana cardholders has fallen. In January, the Arizona Department of Health Services (ADHS) reported that the state had 256,676 medical marijuana cardholders. In July, it reported 158,154. That’s a striking drop that has confused many experts.

Perhaps even more bewilderingly, fewer people are participating in the medical cannabis cultivation program. ADHS reported approving 2,982 cultivation permits in its January report. It only reported 1,844 in July.

Granted, you would expect to see some variation from month to month. These changes seem surprisingly large, though. They also seem like an ongoing trend that might have started after recreational sales began.

Recreational Cannabis Sales Hold Strong

Unfortunately, lower medical marijuana sales mean that the state collects less tax. The good news is that the state’s recreational cannabis industry holds strong.

Although Arizona legalized recreational cannabis sales in 2020, stores couldn’t make transactions until January 2021. That was around the time that medical sales started to fall. Still, monthly recreational sales have exceeded $70 million five times. In April, dispensaries sold approximately $81.2 million of recreational cannabis products, breaking the previous record of $80.4 million.

What Does This Mean for Arizona?

Right now, it means that the state isn’t collecting as much tax from medical cannabis as expected. That could hurt a variety of essential services. The state’s program dedicates:

  • 33% to community colleges
  • 31% to public safety, which includes police, fire departments, and first responders
  • 25% to the Arizona Highway User Revenue Fund
  • 10% to the justice reinvestment fund, which seeks to promote social justice in communities damaged by the War on Drugs and similar anti-drug initiatives

Perhaps these are just short-term concerns, though. If the taxes from recreational cannabis can cover the gap, Arizona doesn’t need to worry. It’s also worth considering that recreational tax revenues are new for the state. They didn’t even exist until 2021.

Why Have Medical Marijuana Sales Dropped in Arizona?

No one has published information showing why medical marijuana sales are dropping in Arizona. A few possible explanations come to mind, though:

  • Adults no longer see the need to seek a prescription when they can simply buy recreational products.
  • Public and private health insurance plans do not cover medical marijuana, so patients might choose other prescription drugs to save money.
  • High inflation has forced patients to live without the benefits of medical marijuana.
  • Legal cannabis seemed novel for a while, but now people have gotten used to it and purchase products less often.

How Will Arizona Respond to These Changes?

At the moment, the state probably will not do anything to influence cannabis buyers. Instead, they will likely keep an eye on tax revenues to determine whether they need to make adjustments. The state will find itself in a challenging situation, though, if medical marijuana sales keep falling and recreational sales do not replace them.

The state could respond in several ways, such as:

  • Lowering the tax rate on medical marijuana to help patients afford their medicine.
  • Increase the tax rate on recreational marijuana to encourage patients to use the medical program.
  • Giving marijuana companies more tax breaks so they can charge lower prices.
  • Adding medical marijuana to the list of medications covered by public health insurance policies. (This might seem unrealistic, but New York is pursuing a similar plan.)

Regardless, Arizona officials need to pay close attention to how these trends evolve over the next several years.

September 2, 2022Comments Off
Americans Evolving Views of Cannabis and Alcohol

Adults in 19 U.S. states and Washington, D.C. can legally purchase cannabis for recreational use. However, all 50 states let adults purchase alcohol. A growing number of individuals and states believe that more states should let adults possess and consume recreational cannabis. Unfortunately, headlines don’t always accurately reflect how Americans feel about cannabis and alcohol.

Two recent surveys from Gallup show what people really think about using these substances.

Americans and Alcohol

When asked about the effects of alcohol on society, 75% of Americans surveyed say that the substance has a “very negative” or “somewhat negative” effect. Only 21% say that alcohol’s effect on society is “somewhat positive.” Only 2% think alcohol has a “very positive” effect.

Not surprisingly, non-drinkers had a more dire perspective. 85% of non-drinkers say that alcohol has a “somewhat negative” or “very negative” effect on society.

Drinkers don’t have a favorable outlook on alcohol either, although it’s notably less pronounced than the attitudes of non-drinkers. 65% of drinkers say that alcohol is “very negative” or “somewhat negative.” 26% of drinkers think alcohol has a “somewhat positive” influence. Even drinkers balk at the idea that alcohol is “very positive.” Only 2% of non-drinkers and drinkers give that response.

As a side note, the percentage of American imbibers hasn’t changed much over the decades. In 1939, 58% of American adults consumed alcohol. Use peaked at 71% in the late 1970s. Currently, about 67% of people say that they drink, at least occasionally.

Americans Have a More Favorable View of Cannabis

When asked about the effects of marijuana on society, Americans are evenly split: 50% think it’s negative and 49% think it’s positive.

Interestingly, a person’s experience with cannabis has a significant influence on their perspective. 66% of Americans who have tried marijuana say it has a somewhat or very positive effect on society. Only 27% of people who have never tried marijuana say it has a positive effect.

What about those who think cannabis has a negative effect on society? Seventy-two percent of people who have never tried marijuana say that its effect is somewhat or very negative. Only 35% of people who have used marijuana think it has a negative effect on society.

Given the correlation of trying cannabis and believing in its positive effects, these numbers will likely shift even further in favor of marijuana. In 1969, only 4% of Americans said that they had tried marijuana. The percentage stayed around 34% from 1985 to 2013. In 2022, 48% of Americans said that they had tried marijuana. Sixteen percent say that they currently smoke marijuana.

If the percentage of people who have tried marijuana keeps climbing, more people will probably have a favorable view of the plant’s influence on society.

Additionally, 60% of Americans say cannabis should be legal for medical and recreational use. Thirty-one percent want legal marijuana only for medical use. Just 8% of Americans don’t believe marijuana should be legal in any form.

Laws and Media Don’t Represent American Views

When you look at these two surveys, it’s clear that the average person thinks alcohol is more harmful than cannabis. Despite that, the majority of states do not allow recreational cannabis sales, while every state allows alcohol sales. The laws are out of sync with Americans.

The media also misrepresents the truth frequently. Even the Gallup titles make alcohol and cannabis sound equally negative. One is titled, “Most in U.S. Say Alcohol Adversely Affects Drinkers, Society.” The other is titled “Americans Not Convinced Marijuana Benefits Society.” These statements aren’t lies, but they also lack the surveys’ nuances.

Someone glancing at the headline would think that most Americans suspect that cannabis harms society. In reality, about half think cannabis is positive and the vast majority think it should be legal.

September 2, 2022Comments Off
Agrify Follows Through With Financial Modification, Positions for Long-Term Growth

The legal cannabis industry promises to generate significant returns for investors and owners. However, anyone looking for short-term returns will find themselves disappointed. The industry still has a lot of work to do. In the meantime, companies must dedicate massive amounts of money to developing products, opening stores, starting efficient grow operations, and swaying political opinions.

Creating a new industry requires a lot of money, and that cuts into profits. If you just glance at cannabis stocks, you might wonder why anyone buys them. Many of them have tons of debt!

In reality, most companies across industries take on lots of debt. They have just enough revenue to cover the payments and still profit a little. That’s not nearly as easy to accomplish when you operate a small business in a new industry.

However, Agrify is committed to showing that it’s possible to grow an industry while repaying debt.

Agrify Commits To Repaying Debt

Inflation and other barriers have made it difficult for Agrify to meet many of its financial goals. The company managed to increase its year-over-year second-quarter revenue by 63.5% in 2022. Unfortunately, it earned 26% less than during the year’s first quarter.

This small stumble didn’t distract Agrify from an earlier commitment to repaying its debts, so it could focus on turning revenues into profits.

The company restructured its finances so it could move closer to this goal. The new agreement:

  • Repays a significant portion of the current, outstanding loan.
  • Exchanges the remaining debt to a new note with a lower principal balance.
  • Does not require amortization payments on the principal for three years.
  • Gives the company an opportunity to repay the loan early with minor financial consequences.

According to Raymond Chang, Chairman and CEO of Agrify, “Modifying our credit facility has been a top priority for us, and we are pleased to be able to move forward with additional flexibility to manage our business, conserve cash, and pursue a variety of compelling growth opportunities with fewer restrictions.

Can Other Cannabis Companies Follow Agrify’s Lead?

Agrify’s leaders and major investors believe that the new strategy will help them build a more dynamic company capable of making decisions based on opportunity instead of financial necessity. It’s much easier to develop a new product when you don’t need to worry about repaying high-interest loans. Agrify believes this is the way forward for them.

But can other cannabis companies follow its lead?

Agrify’s Role in the Cannabis Industry

Ideally, they can do similar things. Then again, Agrify’s section of the cannabis industry faces fewer pressures from regulations and consumer opinion than other companies.

Agrify develops and manufactures equipment that helps other companies succeed. Some of Agrify’s biggest sellers include cultivation and extraction equipment. It also provides professional facility design and engineering services. If you need someone to train your grow op’s employees or sell you distillation equipment, you go to Agrify.

This unique role as a manufacturer, designer, and trainer means Agrify spends money differently than growers and storefronts. It absolutely needs to invest massive amounts of cash into researching and developing reliable vertical grow solutions that work better than those built by competitors. However, it doesn’t need to think about purchasing other businesses to grow its brand authority and reach. If you own a large cannabis company that grows or buys products for consumers, you probably dedicate a lot of money to acquiring other businesses.

This significant difference could convince other cannabis companies that they cannot follow Agrify’s lead.

The Future of Financial Success in Cannabis

Companies certainly have unique concerns in the cannabis industry. What works for Agrify might not necessarily work for a retailer or grower. However, all companies need to start thinking about how they can spend less money without damaging long-term growth. That might mean restructuring current debts, seeking more investors, or entering partnerships instead of acquiring smaller businesses. If corporations do acquire smaller businesses, they might need to keep immediate and future financials in mind.

September 2, 2022Comments Off
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