With the legalization of medical marijuana in Arizona, the need for financing of cannabis marijuana business operations is booming .
In 2016 legal recreational and medical cannabis states generated between $16 to $18 billion. By 2021 it is projected to reach $68 billion. These figures do not include other cannabis related industries such as doctors and growers. There are numerous jobs that are being created due to the legalization of recreational and medical marijuana. These people then spend their money at other businesses. This money ends up paying local and state taxes—these businesses lead to benefits for real estate and construction, as well. The bottom line— legal marijuana is a booming business and one that could result in a lucrative investment.
HOW TO GET ARIZONA CANNABIS DISPENSARY LOANS
As of today, cannabis dispensaries cannot get small business loans through FDIC insured banks due to their regulations. Even though marijuana and cannabis products are legal in many states they are still considered a Schedule I drug by the DEA and the FDIC doesn’t approve of cannabis related business. Banks that approve loans to dispensaries will be subject to prosecution on the federal level. Private money or Hard Money Loans in Arizona are seemingly the only way to get a dispensary loan, as of now. Private loans can provide dispensaries with the capital needed to grow their business. Many investors will provide funding for growing rooms, marijuana kitchens, dispensaries and even websites.
Private money lenders look at investments in a different light than do traditional banking institutions. It is common for a private money lender to look at a project in a “what is needed in the community” way versus “is this too risky.” Private money lenders are not scared to take a risk, in fact that is what their business is all about—risks paying off.
There are various loans that can provide funding for marijuana cannabis dispensaries through hard money and private money lenders. A Bridge loan is a loan you can get through a hard money lender. You can use these for short term funding in order to expand your services. A hard money lender can offer you a short term, higher interest dispensary loan that will fund your company. Many investors will also be willing to take a stake in your company, as well. This could result in your loan being a larger amount and interest rates possibly being lower. Cannabis dispensaries are also allowed to raise up to $1,000,000 per year through crowdfunding. However, equity crowdfunding is unlike normal crowdfunding. Equity crowdfunding means the investors will be financial partners in your company and will get a piece of your company. The benefit is you won’t pay interest on the funds you raise. However, the backers will continue to benefit from your profits.
Arizona is relatively new to the legal cannabis business. Opening a dispensary can be a profitable business.
Because you will be receiving funds from non-traditional sources it is important you understand that these firms are taking a huge financial risk by approving funding to a cannabis based business. It is important to find an investor that has knowledge of Arizona cannabis dispensary loans and can guide you through the process.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.