Cannabis Real Estate Financing – Yes, It's Possible
Acquiring real estate in the Cannabis industry sucks. It’s hard to get loans from traditional sources. It’s a bit of a minefield. Many institutional investors publicly claim they aren’t doing it, yet you hear about isolated incidents where someone was able to get financing for their next cannabis real estate purchase. If you’re looking for real estate financing, and need a zero headache solution – Delancey Street can help.
The solution to getting real estate financing in the Cannabis industry is looking for private money. There’s plenty of private lenders out there, willing to give loans for your next real estate purchase. Many marijuana entrepreneurs face difficulties getting funding because federally chartered banks and credit unions can’t offer financing – marijuana isn’t legal at the federal level. You need private money / hard money, in order to finance – as a result. Delancey Street is a hard money / private money lender, that can help with Cannabis real estate purchases. If we can’t help you, we’ll point you in the direction of someone who can.
We provide funding for all sort’s of real estate needs
We can provide MMJ / Cannabis financing for marijuana warehouses, kitchens, retail store-fronts, and more. Our Cannabis real estate financing services can be used to provide you with money to purchase, or refinance an existing property. We’ll give you the money you need to purchase or refinance for owners who have MMJ tenants. With Delancey Street on your side, you can even get cash out financing in order to get working capital, or to do improvements.
General guidelines for cannabis real estate financing
-The property has to qualify for a cannabis commercial loan
-The property has to be in one of the legalized states
-The LTV is up to 80%
-The loan is up to $10 million
Challenges Associated With Getting Cannabis Real Estate Loans
Banks like working with established companies, or with business models they understand. As a result, many companies – especially in the Cannabis industry, are left in the cold. Cannabis business owners face unique challenges, especially in an industry that is only partially legal. Many cannabis company owners have reported issues when attempting to get funding – even though they are profitable. Bankers who work at financial institutions don’t realize the potential of the Cannabis industry. Before you reach out to a lender, you should first make sure you’ve crossed your t’s, and dotted your i’s.
There are many different aspects of the cannabis industry – and each one has unique needs. For example, cultivating and selling requires different things. Dispensaries and growhouses have different lighting and temperature requirements, in addition to different licenses. Since the needs are so diverse and different, it’s important you make sure you understand your business, and find the correct real estate parcel. It’s important you read the relevant municipal by-laws so that you don’t create problems later. Even in states where cannabis is legal for medical and recreational purposes, some areas and specific cities have specific requirements about where dispensaries and grow houses are allowed to be. Many landlords refuse to rent commercial properties to Cannabis businesses even though it’s legal. There are potential risks to commercial landlords since the federal government may “swoop in,” and take the building away from the landlord.
If you choose to purchase your property, we can help. We can provide you with a loan to cover the cost of the entire building, or simply for the initial downpayment. Alternatively, we can help you refinance your existing loan in order to make repairs, or expand the business.