The industry’s rapid growth, evolving regulations, and competitive landscape mean that capital access can make or break expansion plans, acquisitions, or even day-to-day operations. For multi-state operators, private equity groups, and high-net-worth investors, the challenge is not just finding capital, but finding the right kind of capital that aligns with compliance, growth, and risk management objectives.
As more states legalize and federal reforms inch forward, the number and diversity of funding sources are expanding. According to First Citizens Bank, the most common options are traditional bank loans (where available), investment banks, outside investors, venture capital, private investors, hard money lenders, and government-backed loans for hemp businesses. Each option comes with its own requirements, costs, and implications for ownership and control.
What Are the Main Cannabis Business Funding Options?
The main cannabis business funding options fall into two categories: debt and equity. Debt financing includes term loans, lines of credit, equipment loans, and commercial real estate loans. These allow businesses to borrow money and repay it over time with interest, often using collateral such as property or inventory.
Equity financing, on the other hand, involves selling a stake in the business to outside investors, venture capital firms, or private equity groups. Private lenders and cannabis-friendly credit unions are increasingly active in this space, offering loans with varying rates and terms. Hard money lenders provide quick access to funds but at higher interest rates, often secured by real estate or other assets.
How Are New Funding Models Changing the Industry?
Innovative funding models are reshaping how cannabis businesses access capital. Platforms like Order.co offer vendor and working capital financing, providing up to $500,000 for equipment purchases and growth activities with flexible, extended net terms. This model allows businesses to generate revenue before repayment begins, reducing the cash conversion cycle and improving cash flow. The Green Check Connect Marketplace is another example, connecting cannabis operators with a network of vetted banks, credit unions, and lenders eager to serve the industry. These new models are making it easier for cannabis businesses to fund expansion, source equipment, and enter new markets without relying solely on traditional loans or equity sales.
What About Government and Institutional Funding?
While federal restrictions still limit access to SBA and USDA loans for most cannabis businesses, hemp operators may qualify for these programs. As regulatory reforms progress, especially with the anticipated SAFE Banking Act and potential rescheduling of cannabis, the industry is likely to see broader access to institutional funding and improved terms. According to Angle Ankura, these changes could enhance access to banking, improve tax compliance, and increase investment opportunities for the sector. Until then, most cannabis businesses rely on a combination of private funding sources and creative financing solutions.
Cannabis Business Financing Options: The Highway 33 Capital Advisory Approach
For strategic investors and operators, cannabis business financing options may be tailored to each company’s unique needs and growth trajectory. At Highway 33 Capital Advisory, the focus is on matching clients with the right mix of debt, equity, and alternative funding solutions. This includes facilitating MA transactions, structuring convertible securities, and advising on sale-leaseback arrangements or revenue-based financing. The team’s industry expertise, regulatory fluency, and investor network help clients secure competitive terms, minimize risk, and position themselves for long-term success. By combining financial strategy with operational insight, Highway 33 helps clients unlock new opportunities in a volatile market.
Final Remarks: A Fresh Perspective on Cannabis Funding
The best cannabis business funding options are no longer limited to a single path. As the industry matures and reforms unfold, leaders who explore a range of financing strategies-while balancing compliance, cost, and control-will be best positioned to thrive. Whether through private loans, equity partnerships, or innovative vendor financing, the key is to stay informed, flexible, and ready to seize new opportunities as the market evolves.
